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Politics

Senate Backs Cuts to DMV Fees, Insurance Tax Credit

April 24, 2013 - 6:00pm

A proposal to end a tax credit that out-of-state insurance companies have enjoyed for a quarter century -- so that an unpopular hike on vehicle-registration fees could be reduced -- cruised through the Senate on Wednesday.

Senators backed the measure (SB 1832) by Sen. Joe Negron, R-Stuart, that scales back the controversial 2009 fee increases by $12 a year, a 55 percent drop, over the objection of some insurance industry lobbyists.

"It's nice to finally call a bluff," said Sen. Jeremy Ring, D-Margate. "It's nice to finally stand up and say 'You know what, your business is not going to go under, the state is not going to collapse, we're not going to hit 12 percent unemployment because we're removing these tax exemptions.'"

The proposal by Negron, who chairs the Senate Appropriations Committee, must still get House support.

The tax credit targeted by Negron covers 15 percent of salaries of nonlicensed workers that out-of-state insurance companies employ in Florida.

Negron estimated the insurance industry has received $3.34 billion through the tax break since 1987.

By cutting the hike on vehicle registration, motorists overall could see up to $224 million a year in savings.

Senators rejected an amendment by Sen. Audrey Gibson, D-Jacksonville, to delay the repeal of the insurance industry tax break until next year so the state could study the economic impact.

"To do the study, I think, puts us in a position to ensure we continue down the job creation road that the insurance companies have yielded to us over the years," said Gibson, who voted in support of the bill.

Repealing the insurance industry tax credit could increase state revenue by $231 million a year.

Senators, while voting 39-0 in support of the bill -- Sen. Dwight Bullard, D-Miami, is absent due to illness -- boasted of backing a "Robin Hood bill" that will provide a "direct break for working people."

"We go home and we say we cut taxes, but other than the sales tax holiday no one really sees that their taxes were cut," said Sen. Nancy Detert, R-Venice. "Under this measure they will certainly see it and they deserve it. When times are good you share it with the citizens."

In 2009, vehicle registration fees were hiked 35 percent, while the cost of renewals, titles and driver's licenses were all boosted, as lawmakers faced a $6 billion budget shortfall.

Opponents said the increased fees were regressive hurting poor people as much or more than the wealthy.

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