Florida Gov. Scott will seek $1 billion in tax cuts from state Legislature

TALLAHASSEE -- Seeking to keep a campaign promise, Gov. Rick Scott wants the Legislature to agree to $1 billion in business-friendly tax cuts next year, but he likely faces a skeptical Senate once again.

In his second inaugural address last January, Scott pledged to cut $1 billion in taxes over two years. But he's less than halfway there, and it's a promise he can't possibly fulfill without the Legislature's help.

Scott wants to permanently repeal a corporate income tax paid by retail businesses and manufacturers, which he says would save them $770 million a year in taxes.

He also wants to reduce the sales tax on commercial rents from 6 percent to 5 percent.

Also on Scott's wish list: permanently repealing the sales taxes on equipment purchases by manufacturers; a 10-day sales tax holiday for back-to-school items and nine-day holiday for hurricane supplies; plus extension of a sales tax break on college textbooks for one year.

"We are putting job creators on the road to success for years to come. I want Florida to be the small business capital of the world," Scott said in a statement in advance of his tax-cut announcement at a manufacturers' conference in West Palm Beach.

By emphasizing small businesses, Scott appeared to be addressing a finding by state economists that Florida's economy would be stronger if the state made more of en effort to grow businesses already here rather than recruiting companies from other states.

Florida has a projected surplus of $635 million for the fiscal year that begins July 1. But there are calls of other uses of that money beyond another round of tax cuts:

Agencies under Scott's control want spending increases to replace crumbling equipment and reduce rampant employee turnover due to low pay for child abuse investigators and state crime lab analysts.

A judge has found Florida's services for poor and disabled children so underfunded that it violates federal law and improvements would cost an estimated $700 million.

The state highway safety agency blames antiquated computers for issuing thousands of driver's licenses with the wrong addresses.

Scott wants to keep shrinking the state work force, but an outside audit of the prison system found that staff shortages are so severe that correctional officers are in physical danger.

Scott also wants a large increase in school spending, and he will spend some of his precious political capital with a demand for $250 million in incentive money to attract jobs to Florida over three years.

Senate Appropriations Committee Chairman Tom Lee, R-Brandon, says Scott will have to agree to spending cuts elsewhere to make room for $1 billion in tax cuts, but that it's too early to tell.

"Until we see the spending cuts the governor is proposing, it's hard to know how we would absorb that," Lee said. "But we certainly support cutting taxes and we are willing to support them to the maximum extent feasible."

Scott will release his budget recommendations next month.

He sought $673 million in tax cuts in the 2015 session and his fellow Republicans sliced it to about $400 million. Scott wanted to reduce the tax on cell phones and satellite TV service by $43 a year, and legislators pared it to $20 a year.

Scott's $1 billion proposal makes political sense. Next year is an election year for most lawmakers, so cutting taxes would have political appeal. Having learned from recent experience, Scott also is asking for more tax cuts than he's likely to get.

In addition, 2016 may be Scott's last best chance to make such an ambitious request. By this time next year, he'll be at the midway point of his term, facing lame duck status and an erosion of his political support.

Rank-and-file state workers have not had an across-the-board pay raise in eight years, and Scott prefers cutting taxes to raises for employees.

When he released his last budget recommendations in March, his office said: "The governor's budget proposal provides ongoing tax cuts which will save money for virtually all employees and Florida families."

Scott's proposal for record per-pupil spending in public schools will be expensive, and a proposal by the Department of Education would require higher property tax payments by homeowners and businesses.

-- Herald/Times staff writer Mary Ellen Klas contributed to this report. Contact Steve Bousquet at bousquet@tampabay.com or (850) 224-7263. Follow@stevebousquet.

This story was originally published November 5, 2015 at 5:41 PM with the headline "Florida Gov. Scott will seek $1 billion in tax cuts from state Legislature ."