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Florida can afford to give businesses a break

The state of Florida has a little secret. What would you say if you discovered that Florida has stashed away millions of taxpayer dollars _ Florida business dollars _ in an overbuilt fund fed by years of over-charging Florida taxpayers? Would you advocate returning that money to its rightful owners, the taxpayers of Florida, or would you support its use to expand government? Your answers to these questions will help decide Florida's economic direction. We will either continue on a status quo policy that takes too much money from Florida's businesses and workers or shift to a pro-growth, pro-jobs policy. You and I will decide.

The excess funds are found in Florida's Unemployment Compensation Trust Fund. This fund is designed to provide temporary relief for Florida's unemployed. Every business in Florida, whether large or small, pays unemployment insurance taxes to the state and federal governments for each of its employees. Unemployment benefits are paid by the state from these tax dollars. While a reserve in the fund is prudent to protect Florida workers and businesses from the effects of severe economic downturns, there comes a point past which prudence turns to excess. In Florida, that time is now.

In most years, the amount of tax dollars going into the fund along with interest earned on the fund exceeds the benefits paid out, thereby increasing the dollar amount in the reserve. Last year, for example, Florida collected $755-million in unemployment insurance taxes and earned $118-million in interest on the fund. At the same time, the state spent only $691-million on unemployment benefits. Florida businesses paid into the system $182-million more than was needed. That's a lot of potential jobs and a lot of business capital.

Florida's Unemployment Compensation Trust Fund stands at $1.997-billion. Without any additional tax payments from businesses, the state of Florida could continue to make payments to the unemployed for almost three years at current levels. In contrast, the national average among the states is 1.6 years' worth of reserve. And Florida's fund continues to grow, despite the huge surplus. Such "growth" is accomplished on the backs of Florida business. There is an old saying that is appropriate here: "Kings ought to shear, not skin their sheep."

Why should we continue to build a reserve that is already large with funds? The answer is that we should not. Instead, we should follow the lead of several states that have seen the light and have begun to give their businesses a break.

In North Carolina, for example, in a special legislative session that lasted a mere 2{ hours, state lawmakers placed a moratorium on collection of the unemployment compensation tax for 1996. The tax break: $140-million. In Georgia, the Southeastern Legal Foundation, a conservative legal advocacy group under the leadership of Matt Glavin, fought for and won a $65-million tax cut. Next year, they are going back for more. And last year, Kansas instituted a two-year moratorium on its unemployment compensation tax. It was so successful at lowering unemployment and building businesses that Kansas extended the moratorium for another year _ this time, with the blessing of business and labor groups.

In the coming months, I will be advocating a 25-percent cut in Florida's unemployment tax, which would pump more than $150-million back into our businesses. While lifting the tax burden on Florida's businesses, a $150-million tax cut will still allow Florida to increase the maximum weekly benefits to the unemployed by $25. Under this plan, Florida's workers lose none of their security, but gain the promise of revitalized business and job growth. In short, the proposed tax cut and increase in the benefits is an economic development plan that actually benefits Florida's homegrown businesses and workers.

This tax cut should not be a partisan matter. Most agree that the fund is already large. For example, earlier this year, the Jobs and Education Partnership of Enterprise Florida suggested that it would explore the use of the unemployment compensation trust fund for job training and placement programs. While Enterprise Florida has abandoned plans to pursue this option, it serves as recognition that the trust fund is at a sufficient level. If the fund is large enough to finance the funding of additional government programs, then it should be large enough to accommodate a tax break for businesses and workers. Fortunately, our proposal has broad bipartisan support and is being co-sponsored by Dave Bitner (R-Port Charlotte), Bob Starks (R-Casselberry) and Fred Lippman (D-Hollywood) in the House, and Charles Williams (D-Live Oak) and John McKay (R-Bradenton) in the Senate.

Yet even with this bipartisan support, there are still those in Tallahassee who would like to commandeer these tax dollars for continued growth of the fund. Florida's own Department of Labor has floated the idea of increasing the unemployment compensation tax even as the fund approaches an all-time high.

A 25-percent cut in the unemployment compensation tax will provide a deserved respite from the assault of increased regulations, mandates and taxation by all levels of government.

Jeb Bush is chairman of the Foundation for Florida's Future.

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