Capitol reax: The 2016-17 budget, House tax cut package
The week-long civics lesson includes a speech from Gov. DeSantis.

Florida State Capitol Building

The House and Senate released their fiscal 2016-17 budgets on Friday.

The House proposed a $79.9 billion spending plan; while the Senate proposal is $80.9 billion. Both spending plans far surpass the $79.3 billion budget proposed by Gov. Rick Scott.

The Senate proposal includes money for incentive programs; the House plan does not. The House on Friday also released all of the member requests for district projects.

Chris Hudson, the state director for Americans for Prosperity — Florida, said in a statement:

“Taxpayers took home a partial win last night when the House released its budget. We have a long way to go before sine die, but the fact that there is no funding allocated for the film tax credit, sports incentives, or the Governor’s supposed job creation plan should show taxpayers that the House is serious about presenting a budget that reflects the real needs of our state.”

Jaimie Ross, facilitator of the Sadowski Coalition and president and CEO of the Florida Housing Coalition, said in a statement:

“On behalf of the Sadowski Coalition and Florida’s seniors, veterans, those with special needs and hardworking families, I thank the Senate for continuing to be a stalwart for affordable housing and recommending that all housing trust fund monies go toward housing in their budget proposal. We especially appreciate the leadership of Subcommittee Chairman Senator Jack Latvala, Senate Appropriations Chair Senator Tom Lee and Senate President Andy Gardiner for their support of affordable housing.

Affordable housing is not only important to those who benefit from it, but also carries a large economic impact, as the full appropriation of affordable housing monies for housing will produce tens of thousands of jobs in Florida and billions of dollars in positive economic impact for the State of Florida. As we move forward this session, we ask that the House take the Senate’s position during budget negotiations and use all housing trust fund monies for housing.”

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The state House finance and tax committee released its tax cut proposal Wednesday. The nearly $1 billion proposal includes a 10-day sales tax holiday, an extension of the manufacturing sales tax, and reduces the commercial lease tax by 1 percent.

The proposal has drawn some criticism of the Tax Foundation, which said it “expands on the idea of sales tax holidays.”

Nicole Keading with the Tax Foundation’s Tax Policy Blog, wrote:

“They do not generate economic growth and shift when consumers complete purchases. They also burden small businesses with additional compliance costs and paperwork.

The small bright spot is that the House plan retains two pro-growth provisions from Governor Scott’s plan. Both would exempt business inputs, commercial leases and business machinery, from taxation. Business inputs should not be subject to taxation, otherwise tax pyramiding will occur. It reduces the sales tax on leases to 5 percent, from 6 percent, for the first year, and then to 4 percent the year following. The House’s plan would return it to 6 percent beginning in 2019. The rate schedule differs slightly from Governor Scott’s plan. The plan also continue to exempt machinery and equipment from the sales tax.

Kudos to the Florida House of Representatives for trying to improve Florida’s tax climate, but they are doing this the wrong way. Sales tax holidays are not the way to improve Florida’s taxes. They are silly gimmicks that add needless complexity to a tax code. The House, and Governor Scott, should be using these revenue cuts to pass positive reforms, such as a broad-based cut to the corporate tax rate. not on expanding and reauthorizing sales tax holidays.”

Staff Reports


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