Jeb Bush keeps promoting his record during the runup to announcing his presidential campaign, telling a crowd at a Republican event he cut taxes as Florida’s governor.
"In Florida, for eight years we cut taxes every year, totaling $19 billion, creating a much better business climate," Bush told the crowd at Gov. Rick Scott's Economic Growth Summit in Orlando on June 2, 2015.
Florida’s budget went from $48.6 billion to $73.9 billion during Bush’s tenure, thanks in part to an influx of some 3.5 million people. The state also pocketed $10 billion in cash reserves and won a top bond rating.
But was he able to help cut taxes by $19 billion at the same time? We cracked open the state’s books to take a look for ourselves.
Projecting a point of view
Bush’s Right to Rise political action committee told us they came up with the figure (actually $19.3 billion) using data from Florida’s Office of Economic and Demographic Research. This figure has been cited often by both politicians and the media, but the details are where things get tricky.
Without putting you to sleep with nitpicking of revenue projections, this is what Right To Rise did: Using an annual state report called the Fiscal Analysis in Brief, the PAC tallied the total of all revenue changes from legislative changes in each year between the 1999-2000 and 2007-08 fiscal years.
Here’s where we come to our first round of caveats. Economic experts told us those revenue changes aren’t all necessarily tax cuts. Each year includes dozens, if not hundreds of different legislative actions, ranging from fee and license changes to sales tax holidays and lottery proceeds. Those aren’t all what we’d consider tax cuts, they’re just changes in how much the state collected.
It’s also a good thing Bush used the term "we," because the revenue changes resulted from action by the Legislature. Bush’s influence and his line-item veto power did come into play, but he can’t take credit for all of these measures. He has said, "I cut taxes to the tune of $19 billion" before, though.
Right to Rise added up those cumulative revenue changes for each year and developed a formula to estimate how much state revenues have been affected since. Our experts told us that’s acceptable, but it makes things more complicated.
It means, for example, that if taxes were cut in 1999, Right to Rise counted those revenue changes for each subsequent year through 2007. By the end of Bush’s term, we’re looking at eight years of cumulative tax savings. If you really want to read the fine print, you can see the PAC’s estimates here.
The nominal dollars saved using those projections totaled more than $17.6 billion, but the PAC adjusted the estimate into 2007 dollars. That leaves us with the $19.3 billion estimate.
Economists told us while it was fine to adjust the projections for inflation, there are limitations to that estimate. That’s mostly because analysts don’t really know what would happen to any given revenue source in the real world.
"I think it’s kind of tough to make this kind of analysis, because the economic impact is listed, but would change as the economy changed," Norton Francis, a senior research associate with the Urban Institute, told us. "They’re basically looking at a point in time, going back and revisiting it."
Two big specifics
If you’re still with us at this depth of wonkishness, there’s more to consider.
A big chunk of the $19.3 billion in projected tax savings came from the 2001 law to phase out the federal estate tax, which was backed in Washington by Bush’s brother, then-President George W. Bush. The state essentially received a share of this federal tax, but lost that money when the phase-out was complete. According to the PAC’s projections, by the 2007-08 fiscal year that loss of estate tax money cost Florida about $848 million per year.
Sources told PolitiFact that it’s not really right for Jeb Bush to take credit for the federal repeal, because the state didn’t do anything.
"It’s not like anyone in Florida got rid of it," Francis said. "The federal government got rid of it."
Bush spokesman Matt Gorman said Bush supported the repeal of the tax as governor, and didn’t push to replace it with a state tax. Several states did enact their own tax to make up for the lost revenue.
One review by economist Martin Sullivan, writing for tax news publisher Tax Analysts, omitted the estate tax in his report because it didn’t require legislative action to go into effect. His analysis, which wasn’t adjusted for inflation, tallied the total of Bush-era tax cuts over those eight years at about $13 billion.
Of note is where the biggest chunk of Bush’s claimed tax savings came from: A change in the amount the state taxed intangible assets, like stocks, bonds and accounts receivable. Florida made about $600 million per year from the tax, a fair sum for a state with no income tax.
Bush pushed hard to trim the tax in 1999 and 2000. He finally succeeded repealing the tax entirely in 2006.
Francis said that point gets lost when people use a big number like $19 billion.
"When you’re looking at the intangibles tax, what were the benefits of that?" Francis said. "Was any of it good for the average person?"
Kurt Wenner, vice president of tax research at Florida TaxWatch, which supported ending the tax, pointed out that removing it benefitted people with lower incomes and assets for years, because the exemption was gradually increased before the tax was repealed entirely.
"People considered it a benefit for the rich because the income limits were so high at the end," Wenner said. "Really, just about anyone who had any amount saved up saw a benefit."
Sullivan’s analysis provided one answer most people can probably wrap their heads around. He concluded the real Bush-era tax savings by 2006 ended up being about $140 per person, per year.
Bush said "for eight years we cut taxes every year, totaling $19 billion."
He was citing a projection from his Right To Rise PAC that measured cumulative revenue changes from 1999 to 2007. The total of $19.3 billion is adjusted into 2007 dollars. The analysis includes the federal repeal of the estate tax, for which economists told us Bush couldn’t really take credit. It also includes a big cut to the state’s intangibles tax, which may not benefit your average person much.
Experts said there are limits to how economists can estimate the impact of legislative actions, but the PAC’s projections could be considered fair. What’s trickier is whether Bush can take credit for all the revenue changes or even call them all tax cuts.
The statement is partially accurate but leaves out important details. We rate it Half True.