Scott signs more tax breaks for businesses into law
Gov. Rick Scott today signed a bill enacting a slew of tax breaks and handouts for businesses in Florida as part of his plan to grow the state’s economy and create jobs.
House Bill 7087, the economic development bill, has been described by a progressive-leaning public policy group as “$125 million in special-interest tax breaks.”
According to a press release from the governor’s office, the bill delivers the two tax cuts Scott set out to pass this year.
One of the cuts doubles the corporate income tax exemption to $50,000, which is “eliminating 25 percent of remaining payers and representing a 66 percent reduction in total payers since Governor Scott began eliminating the tax,” the governor’s office reports.
Scott has relied heavily on eliminating taxes for businesses in an effort to grow the economy and help foster job creation. The corporate income tax has remained one of the targets during Scott’s time in office. Last year, Scott also eliminated the tax for many businesses and has vowed to eventually eliminate it entirely.
“By eliminating burdensome rules and regulations, reforming our unemployment system to a reemployment system, providing tax relief to our job creators and holding the workforce boards tasked with connecting Floridians to job opportunities, Florida will continue to see its unemployment rate drop, businesses will grow and Florida will become the best state in the country to open, expand or move a business,” Scott’s office said in a press release this morning.
Alan Stonecipher, research analyst and communications director for the Florida Center for Fiscal and Economic Policy, told me last October that this method of attempting to grow the economy is “unfair” and ultimately bad economic policy that is very “short-sighted.”
Stonicipher said eliminating the corporate income tax in the state would remove about $2 billion from the state’s general revenue — 9 percent of the state’s income.
“It’s a ludicrous approach,” he says. “This will move directly onto the backs of lower- and middle-income people in the state, which will make the system even more unfair.”
Florida has been slashing government programs for vulnerable populations due to the state’s continued budget shortfalls, which can be partially attributed to the state taking in less revenue. Last year, a public policy group said state officials made “unnecessarily harmful” cuts to the state budget in the wake of that year’s shortfall.
The second cut in the economic development bill Scott signed today is a tax exemption for Florida manufacturers. The governor’s press release reports that this provision lowers the “required increase in output from 10 percent to 5 percent- making it easier for manufacturers to grow in Florida.”
The Center for Fiscal and Economic Policy reported last week that this particular tax break was the most costly break in the bill because it represents a reduction in “sales tax payments to the state and to local governments by $56.4 million annually, [which] results from broadening eligibility for an exemption for industrial machinery and equipment by businesses that are expanding.”
Research released earlier this month found that Florida is falling behind other states in terms of budget transparency — and a big factor in the state’s low ranking was that the state does not monitor whether all these tax breaks and subsidies actually help the economy or create the jobs they are supposed to.
Progressives in Florida won a battle over this very issue during the recently ended legislative session. At the beginning of March, Florida Senate President Mike Haridopolos committed to including “a formal study reviewing the effectiveness of economy development incentives, tax credits, exemptions, and subsidies” in the bill Scott today.