Here’s hoping that the most significant event to come out of the upcoming legislative session is not the formal debut of newly anointed House Speaker Larry Cretul. The Ocala Republican takes over for Ray Sansom, whose Funnel Vision finally caught up with him.
Now that the exercise in service cuts and trust-fund plunder – aka the January “special session”– is history, may this now be the moment the Florida Legislature truly takes one for the home team? Will it finally dawn on legislators, regardless of “anti-tax” shibboleths and GOP gospel, that now has to be the time to close loopholes and open up revenue sources, including some “third rail” political ones?
Surely, legislators have noted that Florida is no longer inoculated from recessions by the Sunshine State’s rapid-growth birthright. Surely, they’ve noted that revenue streams need to reflect something other than the sales-tax skewed formula that sufficed when LeRoy Collins was governor. Surely, flat-lined growth matters.
Surely.
According to Cretul, the state revenue shortfall may reach $5 billion for 2009-10. Keynesian solutions are precluded because the state constitution prohibits deficit spending. And deep cuts have already sliced into the marrow of education, health care and public safety.
This should be the agenda:
First, pick the low-hanging fruit. That means finalizing the Seminole gambling compact and adding a dollar in tobacco taxes. Voluntary taxes should always be in play; even more so when the state is in the throes of unprecedented, economic turbulence. And adding to the gasoline tax, which works on several levels, should be on the table. But nobody should get credit for doing the obvious.
Then the heavy hitters.
*Sales tax exemptions, including services. Review them and slam shut the ones that can’t stand the scrutiny. Sure, the elimination-of-service-tax exemptions melee probably cost Gov. Bob Martinez his re-election, but these are not the 1980s. Are we serious about raising revenue – and being equitable – or not? That, candidly, should be a rhetorical question — not a political quandary.
Encouragingly, Senate President Jeff Atwater is on record for advocating a review of exemptions. Presumably, he wasn’t just posturing after the less-than-special session in January. He does cite a revenue figure of $4 billion annually that could result from selected exemption closings.
*Corporate tax-law loopholes. Two in particular, worth an estimated $500 million or more.
One allows corporations to sell high-value properties without paying documentary stamp taxes. It involves the ruse of putting the real estate’s title in a corporation. Then selling the corporation – not the real estate.
The other lets Florida outlets of national companies transfer a chunk of their taxable income to sister companies in states with (even more) lenient tax laws
*Online loopholes. The future has to be now, because the crisis is now. This means doing something more than hand-wringing and musing on the possibility of some day joining a concerted, multi-state effort to prod Congress into allowing states to collect sales taxes on goods sold over the Internet. While other states are gearing up for lobbying Congress, Florida remains a bit player. It’s worth an estimated $1 billion.
Another variation on the online theme is now mushrooming around the state. Florida counties are hoping to get help from Tallahassee over uncollected, online hotel taxes. In effect, online hotel booking companies are skirting Florida’s tourism development taxes. Some estimate as much as $200 million could be at stake for Florida counties.