TAMPA — Gov. Rick Scott told employees at an East Tampa manufacturing plant Thursday that his highly anticipated state budget proposal will include $2 billion in tax cuts that should become a model for President Barack Obama.
Scott said he will cut the state corporate income tax by 45 percent — with plans to eliminate it entirely — and cut property taxes that are now directed to school spending by another $1.4 billion.
The school property tax cut will be offset by other spending cuts, Scott said, to "keep the school budgets the same."
"If the federal government does what we do in Florida … jobs are going to grow very rapidly," he told about 100 employees at Chromalloy, an aerospace manufacturing company. "If we continue down the path of large deficits, more regulation, more litigation, it's not going to work."
Scott spent the day in the Tampa Bay area, speaking at a St. Petersburg Area Chamber of Commerce business lunch hosted in the outfield at Tropicana Field, meeting with Progress Energy executives and then touring the Chromalloy facility.
During a press event announcing his tax cut proposal, he challenged Democrats in Washington to repeal tax increases enacted in the federal health care law, including new taxes for medical device makers and higher payroll taxes for high-income earners.
Scott's tax plan, which attempts to fulfill two prominent campaign promises, has been hailed by conservative icons like Grover Norquist as being business friendly but also has been met with skepticism from top Republicans in the state Legislature.
Both Senate President Mike Haridopolos and House Speaker Dean Cannon say it will be difficult to close a nearly $4 billion budget gap and reduce taxes. It "would be a big challenge," Cannon said.
Floridians won't know exactly how Scott plans to pull it off until Monday, when he releases his entire spending program at a rally with tea party organizers in rural Lake County. But he has used this week to drop hints as part of an orchestrated budget rollout.
He already has said his budget will save the state $1 billion over two years by reorganizing and consolidating parts of state government, and that he will propose making state employees, teachers and law enforcement officers contribute 5 percent of their salaries to their retirement. The pension changes will save the state $2.8 billion over two years, Scott said.
The cut to the corporate income tax — which generated $1.8 billion in revenue last year — would lower rates from 5.5 percent to 3 percent in 2011.
The independent Tax Foundation says Florida already has one of the best business tax climates in the country, only behind Alaska, Nevada, South Dakota and Wyoming. But Scott wants to go farther.
"We already have a low business tax as compared to other states," Scott said. "I want to phase it out. If we do … there is no reason anybody will want to do business in any other state."
Scott's plan for cutting school property taxes is murkier. The state Legislature sets the amount of money local school districts are required to collect through property taxes as part of their contribution to overall education funding.
While avoiding specifics, Scott said he wants to reduce the amount local school boards are required to collect by $1.4 billion, and then find another $1.4 billion in the state budget to make up the difference.
That would be on top of the billions of dollars in cuts the state is required to make in order to pass a balanced budget.
Scott says it's doable. And he'll show how soon enough.
Joking to the chamber crowd in St. Petersburg that his plan will be hated by special interest groups, Scott told supporters to make sure he sticks to his job-creating, regulation-killing plan.
"It's easy to find me," Scott said. "There's one telephone number to the governor's office. I believe in accountability so call if you don't think I'm doing what I said I was going to do.
"If I do what I said I was going to do — and you don't like that — you probably shouldn't waste your time calling because I'm going to continue down the path I'm going because I believe in it."
Aaron Sharockman can be reached at [email protected] or (727) 892-2273.