Wednesday, May 23, 2018
Business

Steve Bousquet: Florida lawmakers shunning insurers is rare sight

Whose side is the Legislature on, yours or State Farm's?

In most years, the answer would be a no-brainer. But a growing number of Florida lawmakers are siding with consumers this time, and insurance companies are complaining loudly.

It's a refreshing sign.

First, let's go back to 1987, when Democrats had overwhelming majorities in both houses of the Legislature.

That year, lawmakers passed a tax credit designed to lure insurance industry jobs to Florida.

Insurers got a 15 percent tax credit for the salaries of their full-time employees. One by one, insurance call centers sprouted along interstate highways in Tampa, Orlando and Jacksonville, and over time it has become quite a nice gift to the industry, too.

The credit is worth $32.5 million a year to Florida Blue (formerly Blue Cross) and $25 million for State Farm.

Senate President Don Gaetz, R-Niceville, believes business tax incentives shouldn't continue indefinitely.

So Sen. Joe Negron, R-Stuart, filed a bill to repeal the tax credit and use the $220 million a year to roll back the increases in car registration fees that were necessary to balance the budget in 2009.

For a typical motorist, it's savings worth $12 a year.

"It's very simple and easy to understand," Negron said.

Unless you represent the insurance industry.

Mark Delegal, who lobbies for State Farm and other insurers, cited several cases where insurers have added hundreds of jobs in Florida. If the tax credit is ended, he said, the industry will have to cut costs or raise revenue, "and raising revenue includes raising premiums."

Insurance lobbyist Paul Sanford, a Capitol fixture for decades, acknowledged with a chuckle that he "had a hand" in the writing of the original tax break.

No, Sanford conceded, he couldn't say for sure that if the credit disappears that jobs will, too. But he warned that repeal will send a negative jobs message about Florida.

"The bigger factor may be the negative message that the elimination of the salary credit will send to insurers and other businesses considering a move to Florida," said Sanford of the Florida Insurance Council.

Tom Feeney of Associated Industries of Florida said repeal of the tax would send a "chilling message" to job creators in the industry.

"It has had very little vetting or analysis," Feeney said of the proposal. "It sends a horrendous message to business around the country. It will pull the rug out from under an industry."

The insurance industry's lobbying muscle is well known in the Capitol. But here's its problem: It can't cite a company that relocated to Florida because of the tax credit, and a veiled threat that a repeal might make a company flee sets lawmakers' teeth on edge.

Even tax expert Kurt Wenner from the reliably pro-business Florida TaxWatch conceded: "You can't draw a direct relationship from job to tax credit."

There is no doubt the Senate will follow the lead of Gaetz and Negron and repeal the tax credit, placing the issue squarely before the House. Speaker Will Weatherford promises a straight up-or-down vote.

Contact Steve Bousquet at [email protected] or (850) 224-7263.

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