House panel rejects Senate's repeal of insurance tax break

TALLAHASSEE — A key House committee voted Friday to protect a decades-old insurance industry tax break, siding with one of the Capitol's most influential lobbying groups and effectively blocking a Senate priority.

As grateful insurance lobbyists looked on, a unanimous House Appropriations Committee voted 26-0 to leave intact a 1987 law that gives insurance companies a 15 percent tax credit for full-time employees.

The tax break has been worth $3.3 billion to an industry with numerous Florida-based call centers handling claims from all over the country. Led by Jacksonville-based Florida Blue, insurers also are among the largest contributors of campaign money, much of it to the Republican Party and Republican legislators.

The Senate wants to repeal the tax break and use the money to roll back motor vehicle registration fees this year by $12 a year, saving motorists about $220 million. Those fees nearly doubled in 2009 to enable lawmakers to fill a major budget shortfall.

Insurance lobbyists said the industry employs 180,000 Floridians, and a business group, Associated Industries of Florida, ran TV ads accusing senators of jeopardizing jobs. That message fell flat in the Senate, but succeeded in the House.

The House strategy is to roll back the tag fees over five years and use general tax revenue to make up the difference, beginning with a $2.40 reduction starting next year and reaching the $12 reduction by 2018.

"Taxing job creators is not necessarily the answer to Florida's future," said Rep. Steve Crisafulli, R-Merritt Island, who sponsored the House proposal.

Said Rep. Charles McBurney, R-Jacksonville: "It's not a great idea to exchange cutting jobs and raising taxes in order to cut fees. It's better to just cut fees."

The House action, which happened during a scripted 15-minute meeting, was a slap at Senate leaders and could have a chain-reaction effect on some House priorities in the Senate in the final week of the session.

"I believe it's better to give a tax break to hard-working Floridians than to big insurance companies," said Senate President Don Gaetz, R-Niceville. The one-sided vote by the House's largest committee makes it "procedurally difficult" for the Senate to prevail, he said.

Senate Appropriations Chairman Joe Negron, R-Stuart, said he was disappointed by the House's decision to safeguard what he called "a lifetime annuity" for the insurance industry.

"There simply isn't any justification to continue to write a quarter-billion dollar check to help the insurance industry meet its payroll," Negron said.

Since 1996, Florida Blue —formerly Blue Cross Blue Shield — has given $10.6 million to candidates and parties, including $4.8 million to the Republican Party of Florida.

Florida Blue gave $275,000 last year to the Committee for a Conservative House, a political fund controlled by House Speaker Will Weatherford, R-Wesley Chapel. Other insurance interests donated an additional $107,000, accounting for nearly one-sixth of the $2 million raised by Weatherford's group.

Follow trends affecting the local economy

Subscribe to our free Business by the Bay newsletter

We’ll break down the latest business and consumer news and insights you need to know every Wednesday.

Loading...

You’re all signed up!

Want more of our free, weekly newsletters in your inbox? Let’s get started.

Explore all your options

Ten of the 26 House members who voted Friday to protect the insurance tax break are from Tampa Bay and South Florida. They are: Reps. Richard Corcoran, R-Trinity; Janet Cruz, D-Tampa; Erik Fresen, R-Miami; Joe Gibbons, D-Hallandale Beach; Eddy Gonzalez, R-Hialeah; Ed Hooper, R-Clearwater; Hazelle Rogers, D-Lauderdale Lakes; Darryl Rouson, D-St. Petersburg; Cynthia Stafford, D-Miami; and Perry Thurston, D-Plantation.

"This is an incentive that was put in place long ago to make us attractive to insurance companies," Gibbons said. "We still want it to be attractive for insurance companies to stay here, especially in Jacksonville and Tampa."

Contact Steve Bousquet at (850) 224-7263.