Rick Scott wants a half-billion-dollar tax cut

October 24, 2013
Florida Gov. Rick Scott will push a $500 million tax cut as he runs for re-election (AP Photo/John Raoux)
Florida Gov. Rick Scott will push a $500 million tax cut as he runs for reelection. (John Raoux/AP)

Florida Gov. Rick Scott will push to cut $500 million in taxes and fees in his next two-year budget, a major step in what looks like a reelection platform aimed squarely at his likely general election opponent next year.

In a white paper [pdf] released Tuesday, Scott’s administration touted Florida’s rebound from the great recession. After being hit hard by the bursting housing bubble, Florida turned a budget surplus in 2012, and the state budget office projects a bigger surplus in Fiscal Year 2013, of around $2.5 billion.

“I walked into my first year with a $3.6 billion budget deficit. We held government accountable and right-sized government,” Scott said in an interview. “I’m going to figure out how to cut costs and quit raising more debt.”

The white paper, which lays out Scott’s priorities for a budget proposal he will offer in the coming weeks, reads like a policy-heavy version of a contrast advertisement. The paper points out job losses and growing state debt that occurred in the four years prior to Scott’s election.

“It is hard to ignore the dramatic shifts in fiscal policy that resulted from Gov. Scott’s tenure, and even harder to ignore the results of a growing and more dynamic economy,” the paper says. “Under Gov. Scott, the state has fundamentally changed the way it makes decisions with its taxpayers’ money.”

Scott says he wants to spend most of that money cutting taxes.

Florida gets the vast majority of its tax receipts — more than 82 percent — from sales taxes. Just 6 percent of Florida’s revenue comes from a corporate income tax, which Scott has cut during his first term. Scott and the legislature also cut taxes on real estate brokers and provided tax credits for capital investments and research and development, among other tax cuts.

Florida’s 2012 tax receipts:

(Source: U.S. Census Bureau)

Democrats say Scott’s tax cuts have overwhelmingly favored business, rather than everyday Floridians.

“The tax cuts last year primarily dealt with the manufacturing tax credit. The average Floridian didn’t really see any of that,” said state House Democratic Whip Alan Williams. “We have to do what we can to make sure we’re investing in the future and not just making what seems to be, sometimes, political giveaways.”

“Governor Scott is in campaign mode now,” Williams added.

Scott said the tax cuts his administration had pushed were aimed at boosting job growth.

“We’ve [cut taxes] for people that are going to help people get jobs, and it’s worked. We’ve done it for small businesses, we’ve done it for manufacturing,” Scott said. “We’ve done it for things that are going to help families the most.”

The white paper sure seems to indicate the pitch Scott will make — a contrast that doesn’t reflect well on Scott’s predecessor, Charlie Crist. Crist, elected governor as a Republican, lost a Senate bid to now-Sen. Marco Rubio (R), in one of the first elections the Tea Party movement claimed credit for winning. Crist left the GOP during that campaign and registered as a Democrat in late 2012. And most state Democrats see him as the best hope to knock off Scott next year.

Scott also said he wants to cut the state debt, which increased during Crist’s tenure. Florida has repaid $3.5 billion of that debt over the past three years.

“My predecessor did $5.2 billion in new debt, and $3.5 billion to the federal government” in loans to pay for unemployment benefits, Scott said. “What we’re doing is in contrast to what the federal government is doing. I’ve had to figure out how to work with my House and Senate. I’ve had to negotiate. I’ve had to compromise.”

A call to Crist’s law office in Tampa on Wednesday wasn’t immediately returned.

The economic recovery, which began before Scott took office, has nonetheless given the first-term Republican plenty of talking points to use as he revs up his reelection machine. After peaking at 11.4 percent in the first quarter of 2010, before Scott took office, the unemployment rate has declined to just 7 percent — a few tenths of a point below the national average — by August. But the labor force participation as of July was at 60 percent, the lowest level since 1986.

The housing market, which went into steep decline during the recession, remains a serious concern in Florida. About one in every 406 homes are in foreclosure, according to the real estate firm RealtyTrac, more than twice the national average. In a yearly budget assessment [pdf], the Florida Office of Economic and Demographic Research called the foreclosure situation “daunting.”

Reid Wilson covers state politics and policy for the Washington Post's GovBeat blog. He's a former editor in chief of The Hotline, the premier tip sheet on campaigns and elections, and he's a complete political junkie.
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Reid Wilson · October 23, 2013