With the prompting of Gov. Rick Scott, a Senate committee heard a plan to reduce corporate taxes. Scott has pushed the cuts and eventual phase-out of business income taxes as a way to produce jobs.
The bill, however, was temporarily postponed during the Commerce and Tourism Committee meeting, and the bill's sponsor, Sen. Garrett Richter, R-Naples, admitted that there is little time to get it through the Legislature this year before the end of the regular session.
"I'm not ready to throw the towel in but I'm realistic and we're running out of time," said Richter.
SB 1236 originally included Scott's plan for a phase-out of the corporate income tax, moving it from 5.5 percent to 3 percent for the 2011-2012 fiscal year, then dropping 0.5 percent each additional year, until it was completely gone by 2018.
An amendment Richter supported would have scrapped that plan and offered an automatic 1 percent reduction of the corporate income tax for the next fiscal year, with additional reductions tied to economic growth. Sales taxes collected by the state would need to exceed 1.2 percent over inflation and population growth to enable business tax reductions, under the amendment.
But the bill was not voted upon by the Commerce and Tourism Committee, as there were concerns among senators over the state's ability to make up the revenue through growth and the potential impact to existing programs, as well as whether the cuts would actually produce the job creation that supporters say it will.
The initial reduction was slated to reduce revenues by $330 million. Senators, engaged for much of the legislative session in budget talks over how to fill the states $3.8 billion budget shortfall, balked at having to find yet more savings.
I dont think were ready to look for another $330 million this week, said Sen. Nancy Detert, R-Venice, who chairs the committee.
Sen. Jeremy Ring, D-Margate, said he believes the corporate tax cuts will help create jobs, but that the existing 5.5 percent state corporate income tax rate, among the five lowest in the country, is already low enough to generate jobs, but is not working.
"We already have a very fair corporate tax system, but we don't attract jobs," Ring said.
The attractions possessed by the Sunshine State that can lure businesses -- no state income tax on individuals, right to work state, fine weather, beaches and tourist attractions -- are not marketed enough, Ring added.
I do not think we can attract any businesses to Florida unless we go out and market ourselves, Ring said. I hope this isnt going to be just some Tallahassee look at what we did thing, now lets sit back and watch the jobs come in, because its not going to happen, he added.
Although the bill in its current form may not pass during the 2011 legislative session, Detert holds out hope that some if its provisions may still make it into law.
"In its current iteration," Detert said, when asked if the bill was dead, "but language could be taken out of this bill and put onto other corporate bills that are already moving."
The bill is needed because the cuts are not included in either the House or Senate budget proposals, nor do they appear to be the subject of much talk in the languishing negotiations between the chambers.
There is currently no similar proposal in the House. The regular legislative session is scheduled to end on May 6.
Gray Rohrer at grohrer@sunshinestatenews.com or at (850) 727-0859.
