The coronavirus is dismantling Florida's next state budget

On Tuesday, Senate President Bill Galvano said the goal was to get the tax package under $100 million.

click to enlarge The coronavirus is dismantling Florida's next state budget
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Senators eliminated a proposed tax cut for the aviation industry and a plan to expand the use of local tourist-development tax dollars, as lawmakers started to trim a House tax package Wednesday amid the economic threat of the novel coronavirus.

The Senate Appropriations Committee also approved a number of its own tax discounts, with the bill (HB 7097) expected to appear Thursday on the Senate floor.

Appropriations Chairman Rob Bradley, R-Fleming Island, said he expects to make more changes on the Senate floor. But Bradley maintained support for some of the high profile features of the House’s $120.5 million package: sales-tax “holidays” for seven days before hurricane season and for three days prior to the new school year and a 0.5 percentage-point reduction in the communications services tax, collected on things such as cell phones and cable and satellite television.

The communications services tax cut is projected as a $24.9 million savings next fiscal year, growing to $59.7 million a year.

Democrats have criticized the cut to the communications services tax, saying it would provide a negligible benefit to individual consumers. But Bradley said “people are really interested in looking at the CST (communications services tax), so I’d be very, very surprised if something happened with that.”

The Senate and the House need to agree on a tax package as they try to wrap up an estimated $92 billion budget for the fiscal year that starts July 1. Legislative leaders earlier this week expressed a need to increase reserves because the novel coronavirus, known as COVID-19, could cause economic damage that would reduce expected tax revenues.

“We certainly want to look for savings wherever we can, to make sure we have robust reserves, as we go into the off-season and the economy does whatever it does,” Bradley said.

While House and Senate leaders are looking at budget changes because of the virus, Bradley said he doesn’t envision a “sweep” of money from an affordable housing trust fund, reducing an agreed-upon $100 million for the Florida Forever program or backing away from 3 percent across-the-board pay raises for state employees --- all high-profile issues in tentative budget agreements.

On Tuesday, Senate President Bill Galvano said the goal was to get the tax package under $100 million.

The Appropriations Committee on Wednesday rejected a House proposal to cut a tax on aviation fuel, a cut that would reduce state revenue by $3.5 million.

Senators, however, kept a proposal to reduce sales taxes on commercial leases by 0.1 percentage point, to 5.4 percent, which would lead to a $15.8 million hit to state and local revenue. Also, the package continues to include a one-time $2 million tax credit for rental car companies. Backers of the rental car tax credit said it is needed to offset increases in corporate income taxes that arose from a 2017 federal tax overhaul.

Senators also removed parts of the House package, including proposals to eliminate an unused pool of money for professional sports stadiums, allow the use of local tourist- development tax dollars to be used for water quality improvements and restrict the use of tourist-development and convention-development money in Miami-Dade County.

Sen. Anitere Flores, R-Miami, noted that Miami-Dade County needs tourist-development tax dollars as it has recently canceled two major music festivals and seen a drop in hotel stays due to the threat of coronavirus.

The Senate added several provisions to the bill, including extending an educational property tax exemption to property owned by houses of worship and used by educational institutions; extending a monthly distributions for the Golf Hall of Fame from June 2023 to June 2033; and exempting from sales taxes admissions to Formula 1 Grand Prix events.

Earlier in the week Galvano, R-Bradenton, and House Speaker Jose Oliva, R-Miami Lakes, expressed a need to build reserves by about $200 million by cutting spending or reducing the tax package because of the emerging economic threats to the state.

 “What we’re going to see now, from here on out and into the summer, is probably a difficult economy,” Oliva told reporters late Monday.

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