Wednesday, July 18, 2018
Business

Lobbying pays off big for business in Florida's 2012 session

TALLAHASSEE — William Ibarra was pleasantly surprised to learn that the taxes he pays at his small Miami charter flight company would be slashed by thousands of dollars, after the Legislature last week passed a slew of business tax cuts.

Frank Stronach, a billionaire horse breeder whose Gulfstream Park racetrack casino has a team of nine lobbyists in Tallahassee, could save millions. He is likely to benefit from corporate tax cuts for his businesses and a $1.2 million tax break carved out specifically for a slaughterhouse he is building near Ocala.

From shop owners, who know little about Tallahassee politics, to the powerful business lobby that thought up many carefully crafted tax breaks, the Legislature this year proved a friendly place.

The total package of business tax relief approved during the 60-day legislative session that ended Friday totaled about $750 million this year, and more than $2.5 billion over the next three years.

Everyday consumers received a much smaller package of direct tax relief — another back-to-school tax holiday, small homestead exemptions and no tax increases. The Legislature was also less ambitious in providing direct economic relief for struggling homeowners, and delivered bone-deep cuts to several programs.

Backed by Gov. Rick Scott, the business-friendly tax plan has been touted as a surefire way to bring Florida's wounded economy back to life. "If we put Florida companies in the position where we can outcompete companies in any other state, in any other country, what happens?" Scott asked during his State of the State speech in January. "Jobs are going to grow like crazy."

Ibarra, whose charter flight company, Aviator Services, has had to deal with rising gas prices and maintenance costs, said the Legislature's decision to eliminate taxes on private plane repairs will help his low-margin business and create jobs.

"My maintenance costs get passed directly to the consumer," said Ibarra, whose fleet of three small planes whisks wealthy clients up and down the state. "There's a huge supply chain. The more I can save, the more I can fly."

But in a year when a budget shortfall led to more than $1 billion in cuts to state universities, hospitals, college students and local governments, not everyone is on board with the state's business-first agenda.

"When the (Republican legislators in the) front rows constantly talk about cutting taxes, they don't mean the middle class," Rep. Scott Randolph, D-Orlando, said in an impassioned floor speech Friday. "They don't mean the working families of this state. They mean big Wall Street corporations, big fat cats up at Wall Street."

Added Rep. Evan Jenne, D-Dania Beach: "Voodoo economics does not work. Trickle-down economics does not work, and certainly corporate welfare does not work."

After his election in 2010, Scott launched a plan to create 700,000 jobs in seven years, with the cornerstone being a multibillion-dollar push to slash business taxes. At the top of the list: phasing out the state's 5.5 percent corporate income tax.

The Legislature surged ahead with that plan this year, approving a $50,000 exemption to the tax, doubling last year's cut and taking nearly 4,000 more businesses off the tax rolls.

The corporate tax cut, valued at nearly $30 million, is part of a $150 million tax relief package backed by Scott that includes breaks for manufacturing equipment ($56.4 million), private planes ($12.3 million), and tangible personal property ($20 million).

Lawmakers in the Republican-dominated Legislature went above and beyond Scott's proposed cuts, offering a cornucopia of tax reductions and incentives worth several billion dollars over the next few years.

A $1.5 billion tax credit program was unveiled and passed in the final hours of the session. It was pitched as a way to help shore up Florida's undercapitalized insurance market. Senate budget Chairman JD Alexander, R-Lake Wales, said the idea came from "one of the big banks." The program could net $225 million in fees for the bank that ends up managing the program.

Sen. Ellyn Bogdanoff, R-Fort Lauderdale, got lawmakers to sign off on a last-minute $830 million package of temporary reductions in unemployment compensation taxes for employers.

While state economists say the cut could leave Florida undercapitalized if another recession hits, the business community hailed it as a huge win.

"If the Legislature had done nothing, (businesses) would have seen an $817 million tax increase," said David Hart, vice president of governmental affairs at the Florida Chamber of Commerce.

Business groups, like the Florida Chamber, wield considerable sway in the Legislature, and leverage their ability to raise money, fund campaigns and create economic development. In the last two years, they've been wildly successful, seeing most of their wishes turned into law. That success includes special tax cuts carved out for specific individuals or entities with advocates in the Legislature.

Miami commissioners benefitted from a solid relationship with Rep. Carlos Lopez-Cantera, the Republican majority leader from Miami.

After the county property appraiser informed the city in November that it may have to pay millions of dollars in property taxes for garages surrounding the new Miami Marlins parking garage, Lopez-Cantera stepped in and told city leaders not to worry.

Lopez-Cantera ushered through a bill that tweaks state law to save Miami taxpayers at least $1.2 million in taxes on the garages.

Other winners: AT&T, Verizon and other telecommunications companies, who saw taxes on communication services slashed anywhere from $35 million to $300 million per year after a late amendment by Bogdanoff. AT&T, which has 74 Florida lobbyists, spent $1.68 million on lobbying last year, more than any other company.

Times/Herald staff writer Steve Bousquet contributed to this report. Toluse Olorunnipa can be reached at [email protected]

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