With two weeks left to go in the 2011 regular legislative session and the House and the Senate at an impasse over the budget, Gov. Rick Scott oozes confidence that one of his most sought-after proposals -- a cut and eventual phase-out of the business income tax -- will make it into the final budget.
Im very comfortable. We have the most fiscally conservative Legislature in history. So Im very comfortable that well end up with the beginning of phasing out the corporate tax cut, Scott said Friday after visiting the Florida Fish and Wildlife Conservation Commission.
The fiscally conservative leadership in the House and the Senate, however, has not seen fit to put Scotts plan to cut the corporate income tax into their budgets. Scotts proposal would reduce the business tax from 5.5 percent to 3 percent next year, and phase it out by 2018.
Senate President Mike Haridopolos, R-Merritt Island, has repeatedly said that his focus is on filling the states $3.8 billion budget shortfall through spending cuts, then looking to find tax relief. In a joint interview with Haridopolos last week, House Speaker Dean Cannon, R-Winter Park, said that business executives hes spoken to have not asked for a cut and it isnt a high priority for him.
Both legislative leaders stated the budgets of their respective chambers are reconcilable, but formal budget talks scheduled to begin last week have yet to begin, and conference members have not yet been announced.
The main differences between the budget stem from the Senates decision to include the states five water management districts and the clerks of court budget for all 67 counties. The inclusion means the Senates $69.8 billion budget is about $3.3 billion more than the House version, but the Senate also includes greater oversight of the water management districts and a property tax break of $210.5 million.
Plans to reform the Florida Retirement System also trip up the two chambers, with the House calling on its 655,000 members to contribute 3 percent of their salaries to their pension plan while the Senate takes a sliding-scale approach based on earned income. Florida is currently the only state in the nation where state workers do not contribute to their own pensions.
Cannon and Haridopolos have said the right things in public about the resolvable differences between their budgets, but there appears to be no progress with two weeks left to go in the session.
I would advise members not to make plans or firm commitments for the period of time immediately following the scheduled end of session, Cannon wrote in a memo to House members last week.
Despite the current impasse and the lukewarm reception to his business income tax cut proposal, Scott seems assured it will be included in the final budget. He has maintained it is vital to reigniting Floridas economy.
You can see around the country that people are starting to expand their businesses, moving their businesses, based on taxes. So its very important, to get economic development growing, to start phasing out that business tax, Scott said.
In his radio address last week, Scott hinted at a possible veto of the budget if it did not include sufficient tax cuts, but declined Friday to overtly state a veto threat.
I remain certain that any budget I sign into law will do the following things: reduce the size and scope of government, reduce the cost of government, and pass those savings on to taxpayers in the form of tax cuts. The budget proposal I sent to the Legislature does those three things. I will not compromise on these principles, Scott said in his address last week.
Reach Gray Rohrer at grohrer@sunshinestatenews.com or at (850) 727-0859.
