Feeling flush with cash, Florida legislators are poised for an unprecedented giveaway of millions of dollars in tax breaks to Floridians and businesses.
With three days left in the legislative session, the primary question no longer is how, but how much.
Tuesday, the House voted overwhelmingly to exempt from state sales tax the first $50 in clothing purchases during several days in August and January. Meanwhile, Senate Republicans want to double the ante.
Today, the Senate is expected to vote on a plan to exempt the first $100 in clothing and footwear purchases during several days in August. Those tax-relief days are expected to save taxpayers $20-million.
And that is not even the biggest break.
More than 3.6-million Florida households with a homestead exemption would receive a $50 check under the Senate Republicans' proposal that will be considered today. An earlier idea that would have limited the refund to properties valued at $150,000 or less has been expanded to include any owners of homes, condos and mobile homes with a homestead exemption.
"I love being part of a tax-cutting extravaganza," joked Sen. John Ostalkiewicz, R-Windermere, at a news conference where Senate Republicans unveiled their package.
His description is not far off.
With the booming economy and the tobacco settlement pumping more than $2-billion in additional revenue into the state, legislators are brimming with ideas for making Floridians happy in an election year. Many are more eager to talk about the millions allocated to tax breaks than the millions earmarked for special interest projects.
"This has been a good year for our economy and we are fortunate that we have been able to meet the needs of Florida," said Senate President Toni Jennings, R-Orlando. "Along the way, it would be nice to reward Floridians who have helped."
But when reporters persisted in questioning Jennings about the pork-barrel projects, she abruptly ended the news conference and disappeared into the Senate chambers as the doors shut behind her.
One of the few breaks all but ruled out: giving $50 rebates on every Floridian's electric bill, as proposed by Senate Democrats. At $400-million, that is too rich even for the most fervent tax-cutters.
By directing tax breaks to individual Floridians, legislators also take the spotlight off of millions of dollars in tax breaks for businesses.
The Senate Republicans, for example, want to phase out over three years the intangibles tax on accounts receivable at a cost this year of $55-million. They also have proposed another $55-million potpourri of tax breaks.
There are tax credits for businesses that offer child care. There are sales tax exemptions for airplane parts and repairs. There other tax exemptions for bovine growth hormones, the aquaculture industry, the silicon technology industry and insurance companies involved in venture capital deals for start-up companies.
"Florida business is nothing more than individuals together," Jennings said. "Anything that benefits them benefits everyone."
Gov. Lawton Chiles already has publicly embraced some of the tax breaks, including the elimination of the intangibles tax on accounts receivable and the sales tax exemption for airplane parts and repairs. April Herrle, the governor's communications director, said Chiles has not endorsed the $50 rebate to property owners with homestead exemptions but has generally called for individual Floridians to share in the tax breaks.
While Senate Republicans are pushing a $326-million package of tax breaks, the House is dribbling out their tax breaks one by one.
Tuesday, House members approved more than $27-million in tax breaks for targeted businesses, from printing companies to advertising agencies and credit counselors.
Speaker Daniel Webster's pet tax break, the sales tax exemptions for clothing purchases up to $50, sailed through the House. It would apply to clothing purchases made Aug. 15-21 and Jan. 15-17 and is expected to cost the state about $25-million in lost revenue.
Another of the House leadership's priority breaks would allow drivers with clean records to renew their licenses for free. The bill, passed by the House on Tuesday, would cost the state about $23-million.
Tax Break Bonanza
Republicans who control the Florida Senate expect a vote today on $326-million in tax breaks for individuals and businesses. The highlights include:
-- A $50 check for every homeowner with a homestead exemption.
Eligible: 3,648,500 households.
-- State sales tax exemption on the first $100 of each sale of clothing or footwear. The House approved a similar exemption Tuesday on the first $50 of each sale.
Eligible: Sales between Aug. 15 and Aug. 19
-- Changing rules for filing intangibles tax so only taxpayers who owe more than $60 have to file a return. Now taxpayers who owe more than $5 have to pay the tax.
Eligible: 180,000 taxpayers no longer will have to pay the tax.
-- Starts three-year phaseout of intangibles tax on accounts receivable. One-third of accounts receivables would be exempt starting Jan. 1. All would be exempt by 2001.
Eligible: estimated 96,000 businesses.
-- Job creation incentives
Eligible: tax credit for businesses that offer child care to employees, sales tax exemption on pollution control equipment, airplane repairs and parts, among others.
TOTAL TAX BREAK COST: $326-million.
Source: Senate Republicans.