Says Florida Gov. Rick Scott’s cuts to education are the same as his proposed corporate income tax rate reduction.
Alan Grayson on Tuesday, March 8th, 2011 in comments on MSNBC.
Alan Grayson returns to MSNBC stage, criticizes Gov. Rick Scott's corporate tax cut plan
Minutes after Florida Gov. Rick Scott finished delivering his first State of the State address, a trio of Democrats took turns rebuffing the new governor on everything he just said.
Senate Minority Leader Nan Rich and House Minority Leader Ron Saunders came first in brief televised remarks, attacking Scott’s plans to cut education funding and make teachers, firefighters and police officers take de facto pay cuts in order to contribute to their own retirement.
They were, in many ways, a warm-up act for former Florida U.S. Rep. Alan Grayson, who used a national cable platform offered by MSNBC to excoriate Scott's plans.
Grayson opened the interview on March 8, 2011, by answering a question about how Scott -- whose former hospital company Columbia/HCA pleaded guilty to 14 corporate felonies and paid $1.7 billion in fines -- could be elected governor in the first place. He said it was par for the course for Florida Republicans.
"The last head of the Republican Party of Florida was literally led away in chains and indicted," Grayson said, referring to deposed RPOF chairman Jim Greer.
Then Grayson cracked a joke, saying Scott once refused to answer questions during a deposition by invoking his 5th Amendment constitutional rights 75 times. "That’s like pleading the 375th."
Grayson closed the interview by criticizing Scott’s plan to cut and eventually eliminate the state’s 5.5 percent corporate income tax, suggesting education spending reductions are funding the corporate tax cut.
"He wants to eliminate the corporate income tax and cut corporate taxes in Florida by $1.5 billion," Grayson said. "He wants to cut funding for the schools by $1.5 billion.
"He’s taking money out of children’s pockets dollar for dollar so he can stuff it in his own."
We knew we’d find a fact check among all the one-liners. We wanted to see if Grayson’s shrewd ledger work is right: Does Scott’s budget reduce education funding by the same amount he would cut corporate taxes?
The numbers are fairly easy to find, it turns out.
Scott’s budget proposal for 2011-12 reduces the total amount of state K-12 education funding from $18.2 billion, to $16.5 billion -- a total cut of $1.7 billion. That number includes local property taxes the state mandates school boards collect (the required local effort), the state contribution from sales tax revenues and trust funds, and money passing through the state from the federal government.
The cuts break down this way (we’re rounding a bit, so everything might not add up exactly):
* The state’s contribution would decrease by about $11 million, but remain largely the same, about $8.9 billion.
* Required local education taxes would shrink by about $660 million, and discretionary local taxes would shrink an additional $200 million -- shrinking the local contribution from about $8.4 billion to nearly $7.5 billion.
* And the state also would not replace about $873 million in federal stimulus funds.
On the other side of the ledger is Scott’s proposed cut to the 5.5 percent corporate income tax. The tax is exactly what it sounds like -- it’s paid as a percentage of the incomes of Florida businesses. Florida already has one of the lower corporate tax rates in the country, but Scott has made eliminating the tax a priority.
As part of his 2011-12 budget, Scott proposes reducing the tax rate to 3 percent. His office says the reduction will save corporations $460 million. Put another way, the cut will trim state revenues as part of the 2011-12 budget by $460 million.
It doesn’t take an Ivy League mathematics degree to figure out that the numbers don’t begin to line up the way Grayson suggests. The tax cuts represent $460 million, which is less than one third of the $1.7 billion education cut.
Part of the issue might be Scott’s budget proposal is actually for two years -- 2011-12 and 2012-13. Over two years -- after factoring in a second reduction of the corporate income tax rate from 3 to 2.5 percent -- corporations would save a total of $1.5 billion, according to the governor’s office.
But that’s not being fair -- $1.5 billion over two years doesn’t exactly compare to $1.7 billion over one year.
In reviewing Scott’s tax-cutting proposals, it appears Grayson’s error also could have been singling out the corporate income tax as a way to cast Scott as a greedy CEO-type looking out only for his buddies.
As we said in a previous item, Scott is proposing a total of $1.7 billion in tax and fee cuts as part of his 2011-12 budget. Scott’s proposal includes cuts to the corporate income tax, a cut to required school district property taxes, and a cut to unemployment taxes. PolitiFact Florida has previously ruled that roughly half of those cuts apply only to businesses, while half apply to homeowners and typical Floridians.
Look at the numbers -- a total of $1.7 billion in tax and fee cuts in 2011-12 versus a proposed total education funding cut of $1.7 billion. They match (well, they’re not identical, because of rounding).
And there’s one final way to look at this. The corporate income tax is estimated to collect about $2 billion in the current budget year. If it’s eliminated, a goal of Scott’s, that would be $2 billion less the state would receive. That’s on the order of the $1.7 billion K-12 education Scott is proposing for 2011-12.
But again, that’s comparing additional budget years beyond even 2012-13 to cuts coming this year.
On MSNBC, Grayson targeted Scott’s proposal to cut the corporate income tax, suggesting the cuts for corporate CEOs are being paid for on the back of students. While he’s right that any tax cut results in money not available to be spent on programs like education, he gets his numbers wrong.
If Grayson had said the tax cuts and fees being proposed by Scott are being paid for by education cuts, he’d have more of a point. But sticking to what he said, we rate this claim Barely True.
Editor's note: This statement was rated Barely True when it was published. On July 27, 2011, we changed the name for the rating to Mostly False.
Published: Tuesday, March 8th, 2011 at 9:12 p.m.
Former U.S. Rep. Alan Grayson, MSNBC appearance, March 8, 2011
Gov. Rick Scott, education spending proposal, accessed March 8, 2011
Gov. Rick Scott, tax and fee cut proposal, accessed March 8, 2011
Palm Beach Post, "Gov. Rick Scott's proposed education budget: $1.75 billion in cuts," March 6, 2011
Corporate income tax collection forecasts, Dec. 14, 2010
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