The Senate has amended and kicked back to the House a tentative $90 million tax-cut package in Florida’s proposed $91.1 billion fiscal year 2020 state budget for an 11th-hour endorsement before the legislative session draws to a conclusion Friday night.
The Senate revised the tax-cut package included in House Bill 7123, a $102 million tax-reduction plan adopted 69-44 on April 25 by the House, to remove provisions requiring school districts include charter schools in distributing sales tax money raised through local referendums and that hospitals to qualify for a charitable tax exemption.
Senators on Thursday added refunds on farm repairs and fuel used in hauling debris from Hurricane Michael in their amended version of HB 7123, which includes a three-day back-to-school tax “holiday” in early August, a seven-day tax “holiday” on hurricane-preparation supplies and a reduction in the commercial lease tax, or business rental tax [BRT] rate from 5.7 percent to 5.35 percent.
The proposed $90 million tax-cut package – which could still change significantly by Friday night – is far below the $335 million in tax cuts Gov. Ron DeSantis red-lined in his budget proposal.
The linchpin of DeSantis’ tax-cut plan was a 0.157 cut in the school property tax millage rate in the “required local effort” component of the Florida Education Finance Program [FEFP], which would cut $289.7 million in property taxes. Neither chamber included the tax cut in their plans.
The Senate essentially stripped the two most controversial components of the House’s tax-break plan in removing a requirement that nonprofit hospitals document the “value” of charitable services they provide, limiting their charitable tax exemption to that “value” and that school referendum money be proportionally distributed to charter schools.
Safety Net Hospital Alliance of Florida Chief Executive Officer Justin Senior said in a Wednesday statement that the “show value” provision represents a “new tax on children’s hospitals that would result in devastating funding losses.”
“We understand there is a push in the Legislature that would essentially target and tax children’s hospitals under the guise of taxing hospitals that don’t perform a certain amount of charity care,” Senior said. “Florida’s children’s hospitals serve all families and provide world class care to everyone – but this tax punishes them for serving a significant number of low-income families enrolled in Medicaid.”
Removing the provision granting charter schools equal access to referendum money is certain to be challenged by the House, particularly by HB 7123 sponsor Rep. Bryan Avila, R-Miami Springs, the House Ways & Means Chairman who maintains it is necessary to comply with a 2017 court ruling that required Indian River County to include charter schools in money raised from a local referendum.
Also, Avila warns, without the provision, referendums are likely to get entangled in lawsuits, such as they recently have in Palm Beach and Miami-Dade counties.
“You have certain counties that have completely excluded charter schools, you have some that left it so vague that no one really knows,” Avila said recently. “There’s a multiple set of districts that have really done several different things and have provided no uniformity. And so, what we’re doing with this language is provide that clarity.”
However, Sen. Kelli Stargel, R-Lakeland, who led the Senate in negotiating the tax-break package with the House, said the two measures stray from “what a tax package has historically been” and should be discussed as individual legislative initiatives.
“At this point,” she said Wednesday, the school referendum and hospital language “are not being considered. But we’ll see where it goes.”
“Our plan is to get something done and send it over there and have a package be finished that focuses on the people of the state of Florida, focuses on making sure we get tax relief, the things that a tax package is intended to do,” Stargel said.
Lawmakers approved a $171 million tax package last year that provided the same tax holiday package as well as property-tax breaks for property owners recovering from hurricane and tropical storm damage.
The House is expected to either approve the Senate-amended HB 7123 or return it to the Senate, and then, for all practical purposes, the Legislature will conclude its business.
Saturday’s single-day session extension – fostered by a state law requiring a 72-hour “cooling off” period before voting on a state budget – is expected to be solely dedicated to adopting the proposed $91.1 billion fiscal year 2020 state budget.
John Haughey is a contributor for Watchdog.org covering principally Florida news.
