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House takes look at new tax plan

House members began looking at a new $1.1-billion tax proposal Tuesday as a coalition of teachers started an advertising blitz calling the Legislature "the most serious threat to Florida's future."

The teachers hope to kick-start legislators into action on passing taxes for schools, which face classroom overcrowding and probable teacher layoffs if a proposed no-new-taxes budget becomes law.

The new tax plan in the House would raise $377-million in business taxes, $180-million in taxes on portfolio wealth, $237-million in sales tax on goods now exempt and $303-million in taxes on services.

As expected, the plan got a tentative nod of approval from Gov. Lawton Chiles and a resounding "no way" from the Senate. Chiles is pushing a $1.3-billion tax increase that raised many of the same taxes as the House plan, crafted by Finance and Tax Chairman Mike Abrams.

To make his plan more politically palatable, Abrams dropped Chiles' proposal to impose taxes on water, sewerage, garbage and cable TV. The Abrams plan also left out hospital and nursing home taxes Chiles had recommended.

The household taxes in the governor's plan prompted Senate Republicans to brand Chiles' proposal the "

'Scuse me for living" tax.

Abrams' proposal, like Chiles' plan, would lift the exemption on services that tend to be purchased by businesses more than individuals, such as secretarial and express air service. Some other services, such as household cleaning or detective agencies, would fall more on the well-to-do than middle-income Floridians.

But the House faces big trouble pushing business taxes. The House plan would reduce corporate interest deductions from 100 percent to 80 percent.

"One of the things they're going to say is the corporate deduction will hit small business," Abrams told key Finance and Tax Committee members. "So we've got to be ready on that one."

Legislative stirring on taxes is not soon enough for Florida teachers.

A coalition of teachers unions, school boards, school administrators and PTAs announced a broadcast and print ad campaign to run in major markets.

"The most serious threat to Florida's future," one ad says, "is: A. Violent street crime, B. Lack of affordable health care, C. Environmental destruction, or D. Overcrowded public schools.

"Wrong. It's none of these. The worst threat to Florida's future is the FLORIDA LEGISLATURE. They're doing nothing about any of these problems."

The ad campaign faltered out of the blocks. One ad contains a grammatical error, referring to "the Legislature" as "they." And the first attempt to put an ad on the air was rebuffed by a Tallahassee TV station.

David Olmsted, general manager of WCTV, said he refused to broadcast the ad because he deemed it to be "opinion advertising." Olmsted said he determined the education spot was not specific enough on an issue and expressed an unsubstantiated opinion that the Legislature is doing nothing.

Area TV stations have run ads in the past criticizing proposals before the Legislature. Among them were ads denouncing the tax on services in 1987, the cigarette tax in 1990 and a hospital tax in 1991.

"I think basically these folks have wimpy management," said Ron Sachs of Florida Education Associated-United. "These spots are right on target."

Taxes in this election year face an even steeper climb in the Senate than in the House.

"The Senate probably wouldn't vote for any taxes right now," said Senate Appropriations Chairman Winston "Bud" Gardner, D-Titusville.

Now here's the plan

House tax writers will begin discussing a $1.1-billion tax proposal in the Finance and Tax Committee today. Here are details of the plan:

SALES TAX ON SERVICES Amount raised in 1992-93

Detective and burglar protection $36-million

Dues for professional organization $29.8-million

Mgt. consulting and public relations $99.3-million

Cleaning service and pest control $45.8-million

Agricultural services $57.5-million

Secretarial and court reporting $7.9-million

Express truck and air courier service $26.7-million

Subtotal $303-million


Fuels used to produce electricity $145-million

Rare coins $3-million

Airport landing fees $20.7-million

Charter fishing $7.1-million

Machinery and equipment $44.4-million

Long-term truck leases $16.7-million

Subtotal $236.9-million


Increase tax by 50 cents per $1,000 $140-million

valuation (exempting the first

$20,000 for individuals and $40,000

for couples)

Repeal the $100,000 per person and $40-million

$200,000 per couple exemption that

applied to the intangibles tax

increase from $1 to $1.50 per

$1,000 valuation in 1990.+Subtotal $180-million


Reduce corporate interest deduction $300-million

from 100 percent to 80 percent.Impose corporate income tax on $61.2-million

Chapter S corporations.Impose corporate income tax on $16-million

limited partnerships.

Subtotal $377.2-million

Total $1.097-million

+ The exemption for individuals with up to $20,000 in intangible assets ($40,000 for couples) still would apply. In effect, the tax proposal would double the intangibles tax on stocks, bonds and notes (from $1 per $1,000 to $2 per $1,000) for the amount between $20,000 and $100,000 for individuals and the amount between $40,000 and $200,000 for couples.