Amendment 10 draws support from Manatee businesses

Published: October 15, 2012 

To prove a selling point, Hann Powerboats owner Russell Hann hammers away at a piece of the impact and puncture resistant material which is used as a protective collar on the Hann 40 Peacemaker coastal patrol boat, under construction at left, which features a bullet-proof cabin. The Hann 40 is the only single-purpose boat Hann builds, the rest of their models are adaptible to different uses, whether for families, chartering or law enforcement.PAUL VIDELA/Bradenton Herald

pvidela@bradenton.comBuy Photo

MANATEE -- Florida's small to mid-sized business operators are asking for voter support.

They're trying to advance Amendment 10.

With a crowded November ballot headlined by the big race, the referendum has gained the support of manufacturers across Florida that see the tax break as a way to boost business.

Opponents, discouraged by the sheer number of amendments proposed this year, argue it's the wrong time to strip operating funds from municipal governments still battered by the recession.

"The hardest thing for manufacturing in America is that in most competing countries, like China, the government gives them a lot of help," said Adel Jamil, president and CEO of C Products Defense in South Manatee, a maker of magazines for AR rifles now expanding its output. "We've turned into a consumer country."

Florida's Constitutional Amendment 10 asks voters to increase the ad valorem tax exemption on tangible personal property from $25,000 to $50,000.

Household goods, money, boats and automobiles already are exempt from the levy, which is now mostly paid by businesses on their machinery.

The measure was crafted to encourage companies eyeing expansion to reinvest in operations -- or even lure a major employer from another state.

Proponents predict the incentive will accelerate job growth through Florida's snail's pace recovery.

"We're very careful with capital investments," said Kevin McLaughlin, vice president of Hann Powerboats in Bradenton. "Any time you could save taxes on business expenses, sure it will help."

The problem is the break comes at the expense of local governments.

In fiscal year 2011, tangible property tax generated nearly $1.8 billion in operating revenue for Florida's 67 counties and their municipalities, according to research by the University of Florida.

That equates to 7.6 percent of the total property tax collections for counties; 6.1 percent for cities.

If the exemption was doubled to $50,000, Amendment 10 would carve a combined $61 million from the tax pot during its first three years alone, according to the state Revenue Estimating Conference, which calculates the anticipated fiscal impact

of proposed amendments.

Opponents also fear writing the proposal into the constitution leaves little flexibility to reverse the decision should another recession flex its muscle.

"What happens if we have a hurricane or a depression?" said Deirdre Macnab, president of the League of Women Voters of Florida, which is against the measure. "This is just the wrong place for the idea. If you have a crisis situation, and this is written into your constitution, it's nearly impossible to change that."

The cuts would come at a time when many governments, including Manatee County, are still seeking stability following four consecutive years of property devaluations -- gutting the largest single-source of revenue by more than half from its peak.

Still, most area officials support the reasoning.

They point to job creation as their top priority -- the start of an economic cycle that could ultimately improve the housing market, lift property values and eventually inject more money back into government coffers through the same tax source at risk.

Many municipalities also may opt to increase their millage rates to offset the losses, although that would just pass the tax burden on to those not directly benefiting from the breaks.

"I guess it's a judgment call between the loss of revenue and incentive for business," Manatee County Commissioner Larry Bustle said. "Right now, we need to tilt in favor of business."

The amendment requires a 60 percent majority vote to pass. If approved by voters, it would apply to the 2013 tax rolls.

Part of the plan also allows governments to raise the exemption further on a localized basis.

A dozen Florida counties already have adopted some sort of tangible property tax exemption, including Sarasota in 2010. Manufacturers are lobbying for Manatee to do the same -- giving bigger breaks for companies with lofty payrolls.

As it now stands, the amendment mostly would benefit smaller businesses, where taxes could mean the difference between buying that $40,000 robotic welder or not, said Peter Straw, executive director of the Sarasota Manatee Manufacturers Association. "This exemption maybe only gets you one piece of equipment, so it's not going to have a major effect on manufacturing infrastructure investments," he said. "But it's a step in the right direction."

The amendment was placed on the voter ballots in March by the Florida Legislature, where it unanimously swept through the Senate and finished the Florida House with a 112-2 floor vote.

Dissenting voters Rep. Hazelle Rogers, D-Lauderhill, and Rep. Barbara Watson, D-Miami Gardens, did not return phone calls and emails seeking comment.

Josh Salman, Herald business writer, can be reached at 941-745-7095. Follow him on Twitter @JoshSalman.

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