The shortcomings of Florida's fiscal policy came into full view a year ago. Unwilling to consider changes to the state's revenue structure except for more tax breaks, the Republican-led Legislature cut 8 percent from already-stagnant funding for public schools and once again shortchanged public universities and colleges. Then last week, state economists revised downward again the state's projected property tax base — a calculation that directly impacts school funding and, by extension, everything else the state pays for.
Gov. Rick Scott's shortsighted solution for restoring some of this year's public school cuts with $1 billion in additional spending? Among various nips and tucks, he wants to undercut the state's hospitals by lowering Medicaid rates. That would mean even more dramatic cuts in federal spending in Florida and could undermine health choices for everyone those hospitals serve.
Heading into the fifth year of significant budget cuts, it's past time for an honest discussion about revenue. And here's the best news for no-new-tax Republicans: Lawmakers don't even need to talk about raising taxes — just about collecting the taxes the state and its residents are already due in the name of tax fairness.
Florida's Republican leadership has turned a blind eye for years to those who aren't paying their fair share of taxes, particularly the state's sales tax — the primary funding source for general state services ranging from education to parks and prisons. The result is that those consumers and businesses that properly pay and remit taxes are increasingly shouldering the cost of running government for everyone else. And a growing cadre of business groups agree it's time to rebalance Florida's tax books for fairness by reining in two groups of scofflaws:
• Online, out-of-state retailers. Amazon.com is the biggest poster child for this category, and for years it has been the leading opponent to multiple states' efforts to modernize tax collection to capture the growing world of e-commerce. In Florida this year, these merchants who shipped goods to Floridians will fail to collect and remit $450 million in Florida sales taxes by one economist's estimate. That lost revenue is expected to grow to more than twice that amount by 2020. Florida should join the multistate compact pushing for reform in Congress or more directly pursue sales tax collections from online retailers as California, New York and Texas have done.
• Online hotel booking services. For years, companies such as Expedia, Orbitz and Travelocity have only remitted sales and tourist bed taxes to state and local governments based on the wholesale price they paid for a hotel room, even if they charged their customers taxes based on the retail price. That practice flies in the face of decades of precedent in which consumers who book directly with hotels are charged taxes based on the retail price and the hotels remit the full amount. State and local officials estimate the scheme has cost their governments more than $470 million in the past dozen years.
Both the out-of-state retailers and the hotel booking services are being unfair to consumers who pay the right amount of taxes. They also undercut the competitiveness of the Florida businesses this state needs to employ its citizens and sustain our communities.
Scott and Senate President Mike Haridopolos have acknowledged the unfairness of at least the Internet sales tax scheme. And the governor said he's open to change — as long as it's revenue neutral. That's a step forward, but not far enough. Florida needs the resources, not another shortsighted campaign gimmick that will further erode the state's ability to invest in the future.
Out-of-state businesses have benefitted for years by Florida's unfair tax policy. It's time for legislators to stand up for Florida's businesses and its citizens, not carpetbaggers.