Gov. Rick Scott has been touting his record of tax-cutting for years now, but in his March 3, 2015, State of the State address, he said he’s been pulling out the red pen even more.
"We have cut taxes more than 40 times in four years," Scott said during his speech to open the 2015 legislative session.
That’s a lot of instances of cutting Floridians’ taxes. Scott said during the 2014 gubernatorial campaign he’d cut taxes 40 times, but the "more" part piqued our interest. But what does Scott consider a tax cut, and how many times has he cut them? We took a closer look to try to break the code.
Scott said in 2013 he considered a tax cut to be a change that reduced government revenue by $3 million in any one year. He altered his definition in 2014 to include more revenue reductions for less than $3 million as tax cuts. That means he included things that weren’t, strictly speaking, an outright reduction in a single tax rate -- like sales tax holidays, stopping automatic fee hikes, tax credits and some temporary measures. He then counted each instance of some things every time they happened (so, for example, the annual back-to-school sales tax holiday is counted multiple times).
Scott’s people didn’t get back to us with new information immediately, but in May 2014 they shared with us a list that included 41 items, so that may explain the "more than 40 times" part of it. In no particular order they are (with estimated savings in parentheses):
1, 2.) Unemployment compensation taxes: The Legislature reduced the number of weeks and payout for unemployment compensation in 2011 ($124.5 million). A tax increase for businesses was rolled back in 2012, although not eliminated. ($830 million for tax years 2012-14).
3, 4.) Manufacturing equipment: A 2012 sales tax exemption on machinery purchases was expanded ($56 million). In 2013, the Legislature eliminated the sales tax entirely for three years, starting April 30, 2014 ($370 million in state taxes and and $83 million in local government taxes through 2017).
5.) Property taxes: Scott and legislators forced most state water management districts to reduce their property tax collections by 30 percent in 2011 ($210 million).
6, 7, 8, 9, 10, 11, 12.) Sales tax holiday: Scott counted the mostly annual tax-free shopping holiday four different times prior to 2013. It applied to shoes and clothing up to $75 per item and school supply purchases up to $15. The state has offered the holiday every year since 1998 except in 2002, 2003, 2008 and 2009.
The Aug. 2-4 tax holiday counted twice, according to Scott, because it also exempted sales taxes on electronic equipment, such as E-readers, laptops and tablets, up to $750 (about $30 million for all four holidays).
For 2014, there were three sales tax holidays: From May 31-June 8, 2014, for Floridians to buy hurricane preparedness supplies without paying 6 percent ($2.9 million); A three-day back-to-school shopping period from Aug. 1-3 was for clothes worth $100 or less, school supplies worth $15 or less, or on the first $750 of the cost of a personal computer (about $30 million); and Sept. 19-21 on the purchase of energy- and water-efficient appliances costing $1,500 or less (about $1.7 million).
13, 14.) Corporate Income Tax exemptions: Lawmakers expanded the exemption for corporate income taxes from $5,000 to $25,000 in 2011, and then all the way up to $50,000 in 2012 (about $60 million).
15.) Tax credit scholarships: A program that gives businesses a tax credit if they purchase tuition vouchers for low-income families to go to private schools was expanded ($25 million).
16, 17, 18.) Energy breaks: A 2013 law implemented part of a 2008 constitutional amendment that says a property appraiser may not base an increase in a property’s just value on the installation of a "renewable energy source device," including windmills, solar panels and roof pools (local revenue losses of $12.6 million by 2017).
Two other tax credits from 2012 aimed at helping agribusiness and renewable energy production facilities are set to expire in 2016. Scott allowed the bill to become law without his signature.
19, 20, 21, 22, 23, 24, 25.) Various business tax incentives: Since 2011, Scott and the Legislature have expanded tax credits available to businesses under a federal/state "new markets" program, allowing businesses to take it against their corporate income tax bill or insurance premium tax bill ($12.9 million per year).
They’ve allowed companies that spent at least $250 million on capital costs from 2011-13 to write-down a portion of their Florida business taxes ($7.5 million).
They temporarily waived a requirement that a new facility creating at least 100 jobs be in certain technology fields in order to qualify for the Capital Investment Tax Credit, though only if they are located in certain Panhandle counties. The exemption lasted through June 30, 2014 ($4.4 million per year).
They also created an annual corporate income tax credit for certain research and development expenses (up to $9 million a year).
In 2014 businesses won a small decrease on the tax rate on electricity ($3 million) and allowed a sales tax refund on bad credit card debt (about $6.7 million).
26, 27, 28, 29, 30, 31, 32, 33.) Targeted breaks: Lawmakers eliminated sales taxes on repairs to planes between 2,000 and 15,000 pounds ($12.3 million). The same bill tweaked requirements for a tax credit for businesses in an urban high-crime area ($3.5 million per year).
The Legislature blocked a July 2013 automatic inflation adjustment factored in registration for hunting and fishing license fees every five years ($4.4 million for 2012-13). A wide-ranging 2012 law eliminated the annual adjustment and surcharge for severing phosphate ($12.6 million annually).
A person licensed as a real estate salesperson or broker associate does not have to apply for an exemption from a local business tax when he or she is an employee of someone else under a 2012 law ($3.8 million from local government per year).
A portion of the 2014 tax cut package clarified how prepaid calling plans were taxed ($7.2 million). It also contained provisions to cut taxes for premiums on bail bonds ($700,000) and title insurance ($5.4 million).
The bill also extended and increased financial incentives for businesses to donate to community development and housing projects for low-income residents by providing a tax credit or sales tax refund ($14.7 million).
34.) Communications dealers: A 2012 law spared communications dealers, in certain situations, from being liable for penalties if they assign a customer to the wrong local tax jurisdiction ($4.7 million annually).
35, 36, 37, 38, 39, 40.) Sales tax exemptions: The tax cut package from 2014’s HB 5601 included several exemptions for more than just businesses. There was a temporary $3.3 million cut for the purchase of cement mixing drums for cement trucks, but the list also includes child car seats and youth bike helmets (about $2.5 million), prescribed diet pet food (another $2.5 million or so) and prepaid college meal plans (about $12 million). These exemptions are in effect until 2017.
41.) Car registration fees: In 2014, the Legislature rolled back the 2009 annual auto tag fee increase. Those fees had gone up to deal with a budget shortfall. The fee cut took effect in September 2014 and saves motorists about $25 a year per vehicle registration (about $395 million annually).
Adding it up
So that totals 41, but do they really count as tax cuts? It depends on how you look at it, experts have told PolitiFact Florida.
If you’re a business, some of the changes are a real benefit. But if you’re a regular, taxpaying Floridian, there’s not a whole lot here for you -- especially if you need to collect unemployment.
Sales tax holidays can change from year to year, and exemptions are temporary. Tax credits only save you money if you spend it somewhere else, and preventing property appraisals from going up if you improve the property means you still have to improve the property.
Ending a fee increase isn’t so much a cut as it is saving people from paying more for something they have to pay anyway, like a hunting or fishing license.
And don’t forget that many times, local governments may raise taxes to make up for their own lost revenue.
Scott has requested several tax changes for 2015, but it is up to the Legislature to approve them.
Scott said, "We have cut taxes more than 40 times in four years."
A list his office sent us last year with 41 things they considered tax cuts likely explains that sum. But the list is full of esoteric tax credits, changes in unemployment compensation and sales tax holidays that don’t meet the purest definition of a tax cut.
Scott’s tax claim is partially accurate but leaves out important details or takes things out of context. We rate it Half True.