Tax plan turns eye to leisure activities
By STEVE BOUSQUET, Times Staff Writer
TALLAHASSEE -- With the Legislature split down the middle over taxes, the Senate Wednesday proposed spending $800-million more on schools this year by taxing professional sports teams, skyboxes, tanning beds, charter boats and even lobbying.
The latest proposal is largely the work of two term-limited Republican senators from Pinellas County, Don Sullivan and Jack Latvala, and will be voted on today by the Senate Appropriations Committee.
The plan merges two Senate priorities by removing sales tax exemptions and spending more money on education. But it also raises taxes, and was immediately rejected by House Speaker Tom Feeney and Gov. Jeb Bush.
"It looks like a $1-billion tax increase to the House," Feeney said.
"We should not be raising taxes in times of economic uncertainty," Bush said. "For every dollar we get rid of in exemptions, there ought to be a dollar in reduction for a tax."
The Senate, however, says it can't pass a budget without more money. And more than ever, the Republican-controlled Senate is at odds with Gov. Jeb Bush, who has staked his claim to a second term largely on his efforts to help schools.
"I personally would not want to go home and deal with a school system in which there is less money in the classroom this year than last year," Sullivan said. "We think, with the governor's budget, that you go back with less money in the classroom next year than you got this year. So we need to have this discussion. It's important."
Senators say that after accounting for inflation, rising insurance premiums and new students, schools are losing ground. A recent St. Petersburg Times analysis found that education funding had increased $10 per student since Bush took office.
The new plan replaces an earlier Senate proposal to increase local property taxes for schools, an idea Feeney and Bush also opposed.
Senators want to repeal 14 sales tax exemptions for one year. Together they would produce $1.1-billion, but experts estimate that the take would be only $878-million after accounting for various factors such as the lag between the levying of a tax and its actual collection. The exemptions would return after a year unless the Legislature repeals them again.
The new Senate strategy is clear: Pick the least defensible tax exemptions and challenge the House and Bush to choose between tax breaks and improving schools. Bush and Feeney already have said they would support considering removing some exemptions, but they have not been specific.
Many of the tax exemptions the Senate is now targeting are for products conspicuously enjoyed by businesses or the affluent, such as skyboxes at college and pro stadiums.
"How do you say that I'm going to give an exemption for a tanning bed instead of funding education?" Senate President John McKay asked.
Latvala and Sullivan are on the Senate Appropriations education subcommittee and say they can't go home without doing more for schools.
"In my last year here, I'm not going to support a budget that goes backward," Latvala said.
Sullivan and Latvala shaped the proposal in a series of private talks over the past two weeks with McKay, R-Bradenton, and Sen. Ken Pruitt, R-Port St. Lucie.
Even with all the new money, Sullivan said Florida schools would be back to the level they were a year ago, before a recession and a slump in tourism after the terrorist attacks forced deep budget cuts. Schools also must cope with more than 70,000 new students, increased health and liability insurance costs, and a 2.1 percent cost-of-living increase.
Sullivan recalled the testimony of Florida State University President Sandy D'Alemberte, who said he would have to reject new students without more money than the Senate initially proposed.
Many school districts are taking unpopular steps to cut costs, including teacher hiring freezes, layoffs of teacher aides and ending summer school.
Although McKay endorsed the new proposal, he emphasized that it does not replace his own plan to ask voters to reduce the sales tax rate from 6 percent to 4.5 percent and make up the difference by ending tax exemptions on nearly 100 services. It is designed not to increase overall revenue the first year.
The new plan did not include many specifics, such as how sports teams would be taxed.
The first stirrings of opposition were immediately heard among lobbyists in the Capitol rotunda.
Lobbyist J.M. "Mac" Stipanovich, who organized a business coalition to fight McKay's plan, noted that the new proposal is more honest.
"Now we're at least getting down to brass tacks and we're calling a tax increase a tax increase," Stipanovich said. "This is a stone-cold, straight tax increase."
-- Times staff writer Alisa Ulferts contributed to this report, which includes information from the Associated Press.
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