Senators Propose Plugging Sales Tax Loopholes Exemption Cuts Would Fund Schools

Article excerpt

Byline: Jim Saunders, Times-Union staff writer

TALLAHASSEE -- Hoping to rake in hundreds of millions of dollars for the state's education system, Florida Senate leaders yesterday proposed closing about $1.1 billion in sales-tax exemptions next year.

The plan, which the Senate says would funnel about $880 million to public schools, community colleges and universities, would replace an earlier proposal that called for raising property taxes throughout the state.

Senate leaders, including President John McKay, R-Bradenton, said schools would gain from closing sales-tax exemptions on such things as public relations services, charter fishing boats and stadium skyboxes.

"If you can afford a skybox, I think you can afford to pay a tax on that skybox," said Wayne Blanton, head of the Florida School Boards Association and a supporter of the plan.

But with Gov. Jeb Bush and House leaders opposed to increased taxes, the plan will be difficult to pass. House Speaker Tom Feeney, R-Oviedo, said the plan could make it tougher to negotiate a final budget in the coming weeks.

"I would not be inclined to go to conference [negotiations] when the Senate is spending $1 billion more than the House," Feeney said.

Senate leaders were careful yesterday to try to separate the education-funding plan from McKay's controversial effort to pass a constitutional amendment this fall that would cut the state's sales-tax rate from 6 to 4.5 percent and close about $4.3 billion in exemptions.

Among other things, the education plan would close the exemptions for only one year to boost school spending. McKay's proposal, which has faced massive opposition from Bush, the House and business groups, would take effect in 2004 and would be permanent.

But business lobbyist Mac Stipanovich, who has helped lead opposition to McKay's tax-reform efforts, said he sees a connection between the two issues.

"I interpret this, regardless of what they might say, as a trial balloon by Sen. McKay," Stipanovich said.

The Senate Appropriations Committee today will consider adding the education plan to its proposed 2002-03 budget, which would take effect July 1. Though the plan would close about $1.1 billion in exemptions, it would only produce about $880 million in increased funding for schools next year because of delays in tax collections.

Senate leaders say all of the increased taxes would go to education, with public schools receiving about $798 million and community colleges and universities receiving smaller amounts. The plan would close 14 types of sales-tax exemptions, leading to new taxes on such things as computer programming, feed for racehorses and ostriches, dance studios and tanning salons. …