The House and Senate spent much of Friday — what was supposed to be the final day of Session according to the calendar —determining how much of a tax cut makes sense in this time of coronavirus and economic uncertainty.
In the end, the number arrived at was much smaller than what was first proposed.
The Senate trimmed down the cuts considerably.
Included in the Senate amendment: a three-day back to school, seven-day disaster holiday, a communications service tax reduction of 0.5%, charitable hospital and private LLC affordable housing property tax breaks, and ad valorem exemptions for deployed service members.
The amendment was “estimated to reduce revenues by $57.6 million” total, said Sen. Kelli Stargel.
“We halved it,” Stargel said, from the original $120.1 million.
Other amendments to the substitute delete-all amendment were floated, with Stargel standing against all of them to ease negotiations with the House.
However, negotiations weren’t eased, until a strike-all amendment was dropped after 9 p.m., in which cuts were even more “limited” in the face of existential challenges.
Stargel explained the substitute amendment as a way to “limit the tax package … to ensure sufficient funds” for coronavirus.
And Rep. Bryan Avila, the bill’s House backer, said the lack of recurring aspects to the final package will give the state flexibility to react as the coronavirus pandemic moves forward.
“Everything is essentially day by day if not hour by hour.”
Among the removals: a QTI tax refund and a reduction in the communications services tax.
Revenue would be lowered. The state coffers would take nearly a $37 million haircut, and local taxes by almost $11 million.
Also apparently shelved: An expansion of the tourist development tax to include “parks and trails” on public lands, as well as “water quality improvement projects,” uses not contemplated previously in that so-called “bed tax.”
Hospital reporting for charity care is now going to be reported on the state level, starting in 2022.
The tax cut package, even modified, was not unanimously lauded.
Sen. Kevin Rader said that cuts came at the expense of services, noting that the back to school tax holiday is ill-timed, coming before kids get their back to school lists.
Senate Democratic Leader Audrey Gibson “had to gasp” when she heard qualified targeted industries were cut, given the use of that to facilitate worker training.
Sen. Jose Javier Rodriguez wanted clarity as to the numbers of the tax package.
The total of tax holidays combined is $47.7 million, Stargel said, way down from the $120.1 million pitch, “recognizing that this situation with coronavirus is affecting [citizens] too.”
Sen. Tom Lee noted, correctly, that “a wise President wouldn’t bring up a tax package amendment on third reading on the 60th day unless he had the votes to pass it.”
Lee then targeted “ideological mindlessness,” such as the need for locals to fund schools via sales surtaxes.
“If the state pulls out and stops funding,” Lee said, “the money’s going to come out of the local school capital outlay fund.”
“We’re ripping the seal off something brand new in this package,” Lee said, referring to capital outlay sharing for charter schools.
In the end, the strike all amendment, and a day of protracted negotiation, created the framework for a deal in the waning moments of the Session.
The process was messy. But completed, as it needed to be, before the midnight hour.
Lee and Rader were the no votes.
“Our 2020 Tax Relief Package offers Florida families a tax savings when they purchase critical supplies in advance of the upcoming hurricane season and as they manage the costs associated with preparing children for the new school year,” said Senate President Bill Galvano.
“Over the last few days, my colleagues have worked diligently to ensure that we can provide the broad-based tax relief opportunities Florida families count on, while still responsibly increasing state reserves to approximately $4 billion to account for impacts associated with the ongoing public health emergency caused by the COVID-19 virus. This legislation strikes an appropriate balance between those important goals.”
In the House, members agreed to the Senate’s deal on a 104-8 vote as the clock neared midnight.