2011 Legislative Wrap-Up
A look at what the Legislature accomplished for business during the two months it was in town.
Session: 2011 2011 Legislature hands major victories to Gov. Rick Scott — and business By Linda Kleindienst
Gov. Rick Scott went into his first legislative session imploring lawmakers to focus laser-like on creating jobs, helping business and eliminating bureaucratic red tape. He emerged getting at least a piece of most everything he — and Florida’s business interests — asked for.
The Legislature pulled a corporate income tax cut out of the hat at the end of the session, reduced government regulations, particularly on the environmental and growth management front, provided more money for economic development and set the stage for loosening the state’s grip on businesses that say they want to expand but have been stymied by red tape.
“This session, the Florida Legislature passed five years of common sense reforms in two months,” said Mark Wilson, president and CEO of the Florida Chamber of Commerce. “Florida now has the opportunity to once again lead the nation in private sector job creation.”
As the session ended, the new governor called his first encounter with the Legislature a “memorable one.”
“We’re on the path to turning the economy around … to making this the state where people want to start their business, grow their business or move their business to,” Scott said.
The highlights include $210 million in property tax relief, a reorganization of state agencies “with an eye toward economic development” and a change in the corporate income tax that will drop about half the businesses from the tax rolls.
Jose Gonzalez, vice president of governmental affairs for Associated Industries of Florida, said the change in Florida’s corporate income tax structure will entice capital investment in the state.
“Gov. Scott established some clear goals for making Florida the most business-friendly state,” he said. “And the Republican majority in the Legislature delivered some key victories for his administration.”
Political and business leaders insist that what the Legislature did this spring will entice businesses to grow and whittle down Florida’s double-digit jobless rate.
“While many other states are raising taxes to balance their budgets, Florida’s Legislature focused on job creation,” said Allan Bense of Panama City, chair of the Florida Chamber Board of Directors and a former speaker of the Florida House. “Florida sent a clear message that we are open for business.”
Here’s a look at some of the business issues tackled by the Legislature during its 9-week spring session, which ended in the early morning hours of May 7:
Corporate Income Tax
Lawmakers boosted from $5,000 to $25,000 the amount of corporate income exempt from the state tax. That amounts to a cut of about $1,100 per business. The move effectively eliminates the corporate tax for nearly half of the roughly 30,000 businesses that now pay it. Estimated to cost the state about $30 million in lost tax revenues. The tax rate remains at 5.5 percent. Scott campaigned to eliminate the corporate income tax and plans to push for more cuts next year.
Corporate Tax Credit
A tweak in the corporate tax credit scholarship allows companies that donate to a scholarship organization to now claim 100 percent of that as a credit. (Current law only permits a credit of 75 percent.) The scholarships are used to help low-income students attend private schools.
Established a secretary of commerce, who will have an office down the hall from the governor, as the single point of contact for streamlining Florida’s economic development processes.
Anyone challenging a developer’s environmental permit will have the burden of proving damage to the environment to get the development stopped. Current law puts the burden on the developer to show the growth wouldn’t harm the environment. At Scott’s behest, lawmakers virtually eliminated the state agency that regulates growth, the Department of Community Affairs. Lawmakers also killed a law that now requires developers help pay for new roads, schools and parks.
An appeal from big business, especially agri-business, helped kill an immigration bill over concerns that it would send the wrong message to immigrant laborers who are key to the state’s tourism, agricultural and construction industries.
A sweeping property insurance rewrite includes several industry-backed changes, including reduced deadlines for filing sinkhole and windstorm claims and allowing insurers to raise rates by up to 15 percent to cover increases in reinsurance costs. (The increases still must be approved by the Office of Insurance Regulation, but would be in addition to any other rate increases.)
Workers will be allowed to get certain occupational licenses even if, as ex-felons, they have not had their civil rights restored. The Senate, however, killed a measure that would have deregulated a handful of professions — including interior design and auctioneering — that are currently licensed by the state.
Businesses could see some tax relief if voters in 2012 approve a measure that would reduce from 10 percent to 5 percent the cap on assessment increases on commercial property.
Sales Tax Holiday
Sought by retailers hoping to boost the turnout for back-to-school shopping, consumers will get a three-day sales tax holiday Aug. 12–14 for clothing and shoes priced under $75.
Eliminates the duplicative requirements that enforce statewide seaport security standards in addition to federal rules. Supporters say that Florida seaports have been at a competitive disadvantage by having to adhere to both sets of security standards.
State Revenue Cap
A constitutional “Smart Cap” amendment to be placed before state voters in 2012 would replace the existing constitutional limit on state revenues, which is pegged to personal income growth, with a limit based on inflation and changes in population.
The tax paid by businesses to cover unemployment will be cut by 10 percent, saving the average employer $18 per worker when the law takes effect in 2012. And the maximum number of weeks that unemployed workers can receive state benefits is reduced from 26 to 23 weeks if the employment rate stays above 10.5 percent. (Weeks could be cut to as low as 12 or added, depending on the unemployment rate.) It will also be easier for businesses to show that an employee was fired for cause, meaning the worker would not get benefits. The maximum benefit will remain at $275 a week, one of the lowest in the country.
The News Service of Florida contributed to this report.
Did you know?
2011 Legislative Session
Bills Filed: 2,186 (1,110 in the House, 1,076 in the Senate)
Bills Passed: 285