Year after year, the Legislature cobbles together a no-new-taxes budget that short-changes schools, public services and state workers. This year, lawmakers are following the same playbook.
With three weeks to go in the legislative session, brace yourself for the usual bloviating from Tallahassee about how your politicians are giving generous and broad-based tax relief to their hard-working constituents.
House Republicans rolled out an ultra-light tax package this week, highlighted by a three-day back-to-school sales tax holiday, a seven-day hurricane preparedness tax holiday and a first-time reduction of the sales tax on rent paid by businesses, from 5.7 percent to 5.35 percent.
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For three days this summer (Aug. 2-4), a new $30 backpack for Junior will be tax-free, for a savings of about $1.80. All told, the tax relief totals about $100 million a year in what’s expected to be the state’s first $90 billion budget.
That cut in the business rent tax is tiny, but it has been a very long time in coming. Since 1969, Florida has taxed commercial rents — the only state to do so.
And while Florida slaps a sales tax on struggling Mom-and-Pop businesses renting space in thousands of strip centers, far more groups reap the benefits of sales tax breaks year after year, avoiding paying their fair share of taxes through skillful use of political muscle on politicians who are too susceptible to it in Tallahassee.
For Florida consumers, the major items exempt from the sales tax are groceries, residential rent and prescription drugs.
But the tax code is riddled with hundreds of exemptions with a combined value of $15 billion a year. The 6 percent statewide sales tax — the state’s revenue workhorse — produces about $25 billion a year.
Bottled water is tax-free in Florida. So are cell phone towers, charter fishing boat trips, farming equipment, newspaper inserts, veterinary medicines, aircraft parts, condo recreation leases and electricity used in manufacturing. Florida gives away $2 million a year to pro sports stadiums.
The wackiest exemption of them all might have been for ostrich feed, passed by a sorely misguided Democratic legislature in 1992 under the guise of promoting ostrich farming.
Nearly a decade later, Senate President John McKay, a Republican, pushed for a systematic review of all those sales tax exemptions, with the goal of rolling back the 6 percent sales tax to its original 1949 level of 3 percent.
That would have been by far the biggest tax break in Florida’s history.
But businesses that enjoyed their special tax advantages — TV stations in particular — screamed bloody murder. Their armies of lobbyists swung into action, as Gov. Jeb Bush and the House doubted the promises of “revenue neutrality” and swiftly rejected McKay’s plan.
The tax exemptions survived, and in subsequent years, they multiplied.
McKay also dared to propose taxing professional services that are tax-free, such as accounting, legal work, real estate, dry cleaning and pest control, which today would produce $31 billion in revenue, according to state analysts. The 1987 legislature taxed services, but retreated in the face of strong public opposition, and raised the sales tax to 6 percent instead.
Ten years ago, another attempt to force a review of sales tax exemptions fizzled a second time, and nobody has made a serious try since then. The service-drive economy in the nation’s third-largest state is mostly exempt from state taxes.
Year after year, the legislature cobbles together a no-new-taxes budget that short-changes schools, public services and state workers. This year, in typical fashion, they’ll shift hundreds of millions of dollars from funds set aside for affordable housing and other programs, to make sure the budget balances, as the law requires.
State prisons are falling apart. Some state agencies have operating deficits and long waiting lists for services. The Florida Highway Patrol has long been hobbled by rampant turnover because of low salaries.
But fear not — the state is providing tax relief!
“It’s a great package,” gushed Rep. Byron Donalds, R-Naples, a member of the tax-writing House Ways & Means Committee.
In Ways & Means Thursday, Democratic Rep. Anna Eskamani of Orlando criticized Florida’s sales tax as a regressive system that hurts the poor the most. She proposed a five-year cap on future sales tax breaks, which would force future legislatures to re-enact them.
But Republicans, with their far bigger numbers, easily defeated it. To even question a decades-old sales tax break is out of the question, and might even be unconstitutional, they said, because voters approved a constitutional amendment last November requiring a two-thirds vote to impose a new tax.
The status quo will endure. In Florida’s ostrich-like Capitol, the repeal of a narrowly-focused special interest tax break is a tax increase.
Steve Bousquet is a columnist for the South Florida Sun Sentinel in Tallahassee. He can be reached at email@example.com or (850) 567-2240. Follow him on Twitter @stevebousquet.