A proposed drop in the state corporate income tax from 5.5% to 4.5% is a bit mind boggling for Senate Democratic Leader, Sen. Al Lawson, D-Tallahassee.
Lawson, Republican Gov. Charlie Crist, and other state leaders spoke to a group of reporters at the Associated Press annual gathering of government reporters in the Capitol recently.
When asked about Crist's proposal to cut the tax from 5.5% to 4.5% on the first $1 million of taxable income, Lawson's response departed from the usual politically correct comments, saying, “I think it's kind of insane.” Lawson then added, “You just can't camouflage people. It's going to take more money from the budget.”
Two days later, Crist rolled out his proposed budget for next year which increases this year's $66.5 billion budget to $69.2 billion, a 4.1% increase, despite $100 million in tax cuts, including $57.4 million from lowering the corporate income tax rate. The reduction in the corporate income tax represents roughly eight ten-thousandths of the budget.
Republican legislative leaders, however, point out that the governor's budget relies on the rosiest of scenarios, including a new gambling compact, voters going along with legislative proposals to scale back the class size amendment, $4 billion in not quite guaranteed federal stimulus funds, and $2 billion in expected new state revenues.
Interestingly, House Democratic Leader Franklin Sands, D-Weston, who says he has “a pretty damn good understanding” of how business works, had this to say about the proposed budget in a press release: “Governor Crist wisely embraces the use of federal stimulus aid .... Unfortunately, his budget dangerously relies on draining important state trust funds, draws down budget reserves to levels that will require close scrutiny, and is built on a sunny optimism that is in sharp contrast to the dire warnings of Republican legislative leaders.”
With budget politics in full swing in Tallahassee, spring cannot be far behind.