No legislative will to make Scott's big corporate tax cuts

Gov. Rick Scott presented a 2011-12 budget to lawmakers on Feb. 7, 2011, that cut the corporate income tax rate from 5.5 to 3 percent, the first step in his plan to phase out the business tax entirely over seven years.

But when the Legislature finally passed its budget on May 7, it was unwilling to make the deep cuts needed elsewhere in the budget to cover the $459 million in corporate tax relief. The final budget that Scott will sign or veto includes no corporate tax rate reduction.

Instead, it includes only a $30 million reduction, created not by rate cuts but by expanding the current exemption for the corporate tax. The budget expands the current exemption for businesses from $5,000 in taxes they owe to $25,000. House Speaker Dean Cannon says the expansion of the exemption reduces the 30,000 businesses that pay the tax by about half.

The change represents less than 1/10th of the cut Scott had sought.

Cannon and Senate President Mike Haridopolos maintained from the start of the session that it would be difficult to find the cost savings needed to cut the corporate income tax rate.

"As I've talked to so many members and, more importantly, business leaders across the state, they feel that stability is more important than reducing a 5.5 percent corporate tax rate," Haridopolos said on May 1. "My stance has been and will continue to be that the most important thing is to show budget discipline by spending less."

The Legislature did include $210 million in property tax cuts in its budget by reducing the taxing authority of local water management districts.

"By eliminating the corporate income tax for nearly half of the Florida businesses who pay it, we are working with our partners in the Senate and Gov. Scott to make our common goal of private-sector job creation a reality," Cannon said in a statement on May 5. "I share Gov. Scott's desire to reduce and hopefully eliminate the corporate income tax. As we work to attract new businesses to locate and encourage existing businesses to expand in our state, today's legislation is a great first step and a sure signal that Florida is open for business."

But on eliminating corporate taxes, Scott will have to wait until next year to try again. We rate this promise Stalled.