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Florida Lawmakers Trim Tax Cuts Amid Coronavirus Worries

A slimmed tax-cut package is heading to Gov. Ron DeSantis, after lawmakers late Friday sought to bolster state reserves that could be needed as the novel coronavirus damages tourism and other key industries.

The revamped package calls for holding back-to-school and hurricane-preparedness tax “holidays” that would reduce state and local revenues by $47.7 million. But it leaves out proposed tax cuts on such things as cell-phone bills and commercial leases.

The House approved the proposal (HB 7097) just after 11 p.m., following passage by the Senate.

House Ways & Means Chairman Bryan Avila, R-Miami Springs, said the final package provides the state needed economic flexibility to respond to the coronavirus, known as COVID-19.

“We want to be prepared moving forward,” Avila said. “We don’t know how this is going to develop. Everything is essentially day by day, if not hour by hour.”

Budget leaders, still working on a roughly $92 billion spending plan that is expected to be completed next week, are looking to bolster reserves by about $300 million more than anticipated. The virus has caused the short-term shuttering of Central Florida theme parks, most professional sports and sectors of the cruise industry.

House Speaker Jose Oliva, R-Miami Lakes, cautioned lawmakers they should anticipate bigger budget challenges next year -- or possibly sooner.

“What we do know is that it has already become a very serious economic risk. That we know,” Oliva told reporters after Friday’s session. “The impacts of this will be felt. The question now is, will it be felt now before the new legislature organizes and we have to come back, or with enough money in reserves, will we be able to sustain that until the new legislature gets organized (following the November elections)?”

“I would say it is obvious,” Oliva continued. “When you see the things that have shut down around the state, the major drivers of a lot of our sales tax have shut down, I think the impacts are going to be significant.”

The approved tax package would offer a seven-day sales-tax “holiday” for disaster supplies before the hurricane season and a three-day tax holiday in August for purchases of back-to-school clothes, supplies and personal computers.

“Over the last few days, my colleagues have worked diligently to ensure that we can provide the broad-based tax relief opportunities Florida families count on, while still responsibly increasing state reserves to approximately $4 billion to account for impacts associated with the ongoing public health emergency caused by the COVID-19 virus,” Senate President Bill Galvano said in a statement.

The House had approved a tax package last week that sought $120.5 million in state and local revenue reductions.

The largest part of the package eliminated Friday was a proposed 0.5 percentage-point reduction in the communications-services tax, which is collected on such things as cell phones and cable and satellite television.

That proposed cut was projected to reduce revenue by $24.9 million next fiscal year.

Critics said cutting the communications-services tax would be more of a benefit to the industry than to customers, who would see negligible savings on their bills.

Other parts of the initial House proposal that didn’t make the final cut were reductions in a commercial lease tax, an expansion of a tax discount on aviation fuel, and a one-time $2 million tax credit for rental car companies that was designed to offset increases in corporate income taxes that arose from a 2017 federal tax overhaul.

On Thursday, Senate Appropriations Chairman Rob Bradley, R-Fleming Island, said lawmakers must be “realistic” on tax-cut issues and in setting “appropriate” levels of reserves.