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Tenacious tax break lays an egg, but lingers in Florida

TALLAHASSEE — Ostriches, they're, uh, sort of like chickens. Meaner birds, leaner meat.

That was the rationale back in 1992 when lawmakers gave farmers a sales tax break on ostrich feed to encourage ostrich farming in Florida.

It didn't work. Now, there are few — if any — ostrich farms left in Florida.

So every year since 2003, Sen. Bill Posey has tried, as he did Thursday, to do away with the ostrich feed sales tax exemption, which has become the symbol of the absurdity of some sales tax exemptions.

It's also an example of why a measure on November's ballot that would force lawmakers to examine such exemptions is such a radical idea.

Earlier this month, the Taxation and Budget Reform Commission, a panel that meets every 20 years to review tax law, sent a ballot measure to voters asking for the elimination of $9-billion in property taxes for schools. If 60 percent approve, the Legislature would have to replace the money by raising the sales tax, cutting other parts of the budget or by eliminating tax exemptions.

Repealing such exemptions won't be easy. Posey has tried to do so with ostrich feed for five years.

"It's just emblematic of a problem we want to solve, to get useless, outdated and obscure exemptions off the books," said Posey, a Rockledge Republican.

And this year, he faces the same challenge, as the measure again lacks a House companion bill.

Why? Look no further than the lobbyist for animal feed manufacturers, who raised a lone voice of worry on the ostrich feed bill Thursday.

"We're very concerned of the precedent this sets," said Florida Feed Association lobbyist Gene Adams. He acknowledged the ostrich feed tax break is useless. But he pointed out that other types of livestock feed — including feed for chickens, cows and horses — are exempted from sales tax in the same sentence of the law. "Poultry businesses can move to other states," Adams warned.

Every special interest group with a tax break (including the media) worries it may be next on the chopping block, once lawmakers start reviewing exemptions. So for years, they have successfully lobbied to stop the process altogether.

Consider for example, what Posey encountered in 2004. That year, the full Senate agreed to eliminate the ostrich feed tax break, as well as another sales tax break for stadium skyboxes at sporting events.

But the full House has never taken them up. Then-House Speaker Johnnie Byrd, R-Plant City, equated eliminating exemptions with a "tax hike."

Rep. Dean Cannon, evoking the biggest tax exemptions — for food and medicine — said they help the poor and needy. They also make for a business-friendly climate, he said.

"The worst thing you can do in a bad economy is to increase the taxes on employers," said Cannon, a Winter Park Republican in line to be House speaker in 2010.

Sales tax exemptions aren't just a Republican thing, however. Democrats, until they lost power a decade ago in both chambers, were just as likely to pass them to appease special interests.

But since becoming the minority party, Democrats have frequently called for ending exemptions to offset cuts to education and health care for the poor. Their cry has been much louder this year, as the state is facing a $2.5-billion revenue shortfall.

On Thursday, Senate Democrats called to eliminate a sales tax break on chartered deep-sea fishing boats, which they say could raise $65-million.

But Posey and other Republicans say tax breaks need to be reviewed on a case-by-case basis. "To get to the billions of dollars that Democrats want to get to, you're talking about having to engage in tax exemptions that would clearly hurt the average families," said Sen. Mike Fasano, R-New Port Richey, who often co-sponsors the bills to get rid of the ostrich feed and skybox exemptions.

Sen. J.D. Alexander, R-Winter Haven, noted there's little gained beyond symbolism from eliminating the ostrich feed exemption. "It may collect $5.50."

So Senate Democrats scoff.

"It's more like a joke, because it doesn't raise any money," said Sen. Al Lawson, who will be the Senate's next minority leader. "I certainly hope Sen. Posey and his colleagues will look at some more serious sales exemptions. We don't need to mess with ostriches."

Jennifer Liberto can be reached at (727) 224-7263 or jliberto@sptimes.com.

>>Fast facts

No sales tax here

More than $12-billion in sales tax exemptions currently exist in state law. They include:

$71.3-million: Electricity for manufacturing

$63.5-million: Chartered fishing boats

$55.3-million: Boiler fuels used by industries

$42.3-million: Bottled water

$41.3 million: Newspaper and magazine inserts

$33.8-million: Farm equipment

$27.9-million: Livestock feed, including ostrich

$24.7-million: Free advertising publications

$5.0-million: Boats temporarily docked in Florida

$0.9-million: High school and college stadium skyboxes

Tenacious tax break lays an egg, but lingers in Florida 03/27/08 [Last modified: Friday, March 28, 2008 2:00pm]
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