Gov. DeSantis’ insurance cut back on track as House adds to tax package

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With three weeks left in the Legislative Session, Gov. Ron DeSantis’ plan to reduce insurance premiums for homeowners is back in play.

A reduction of insurance premium taxes and flood premium taxes was left out when the House unveiled its tax cut plan (HB 7073). But the House Appropriations Committee has now inserted an amendment adding the proposal to the bill.

The plan would reduce premium taxes by 1.75% on homesteaded properties, while requiring insurers to pass on those savings to consumers to get the credit on their tax liability. It would apply to policies enacted or renewed after Oct. 1, and the break would last for one year.

House Democratic Leader Fentrice Driskell of Tampa said she supported the amendment but wanted to give more of a break to homeowners. She noted the break would save homeowners $17.50 for every $1,000 they pay in premiums. State economists haven’t scored the House plan, but a similar Senate proposal would save $363.2 million in total over two years.

“When you aggregate all those savings up as a tax credit it’s great for the insurance companies but it’s not as great as we need it to be for the homeowners” Driskell said.

Driskell was one of four Democrats who voted against the underlying bill.

Rep. Stan McClain, an Ocala Republican and sponsor of the bill, defended it as beneficial to both businesses and the average citizen.

“I do believe that it’s a good balanced approach between consumers and businesses,” McClain said.

The Senate’s version of the tax cut package (SB 7074) also includes the insurance tax cut. It would apply to homes covered at up to $750,000 and cover flood policies, and eliminate assessments for the Florida Insurance Guarantee Association.

Bill sponsor Sen. Blaise Ingoglia, a Spring Hill Republican, said it would save qualified homeowners 3.5% on average in their premiums. He argued that while those savings — $35 for every $1,000 in premiums — may be small, they will help homeowners until the market settles and premiums flatten out, in response to the litigation-squelching changes approved by lawmakers in the last two years.

“This was a way we thought we could bridge the gap until we start seeing the relief that we are expecting,” Ingoglia told reporters.

Rates, though, have continued to rise for many homeowners. An Allstate subsidiary, Castle Key, will ask state regulators on Wednesday for a 53.5% statewide average increase for condominium policies.

The overall Senate plan is a $900 million cut. It passed unanimously through the Senate Finance and Tax Committee Tuesday.

House and Senate leaders will have to iron out the differences between the bills in the final three weeks of the Regular Session.

One of the major differences is a reduction in the business rent tax, which is paid on a sales tax on leases and is set to fall to 2% in August. The House bill would cut the rate to 1.25% starting July 1. State economists project the move to save businesses $308.6 million, a reduction from the previous estimate of nearly $340 million. The Senate bill doesn’t include the business rent tax reduction.

Another major difference is a plan to boost the allowance for businesses remitting sales taxes to the state from $30 to $45, saving businesses $47.3 million next year. The provision is in the Senate plan but not in the House plan.

There is also a clash over how to approach tourist development taxes. The House wants to phase out the existing authority to collect tourist development taxes on hotel and motel stays, which fund local tourism marketing, overseen by local governments. The provision would require voters to reapprove tourist development taxes every six years, starting in 2029.

The Senate plan doesn’t include that provision, but would require a Tourist Development Council to get a supermajority vote before spending more than 25% of its revenue on a single project.

There are areas of agreement, though, especially regarding a slate of familiar sales tax holidays.

The Senate plan matches the House bill in setting up a “Freedom Month,” with sales taxes exempted for event tickets to museums, sporting events, plays, festivals, fairs and more, as well as outdoor items. It will last all of July, but that’s a reduction from the “Freedom Summer” sales tax holiday last year that lasted three summer months.

A two-week holiday on back-to-school items starting July 29 is part of both bills, as is a one-week holiday on tools starting Sept. 1. There’s also two separate two-week sales tax holidays for disaster preparedness items, starting June 1 and August 24.