State: Senator's end run puts halt on McKay tax idea

TALLAHASSEE -- Abandoning his ambitious plan to close tax loopholes, Senate President John McKay floated a new idea Wednesday: a legislative committee to review every tax break over 10 years.

But even before McKay could act, a Democratic senator who had been a McKay ally stole the show with a tamer, business-friendly plan that drew cheers from Gov. Jeb Bush and business lobbyists.

The defection by Sen. Richard Mitchell, D-Jasper, is another sign that support for overhauling the state's tax system is getting weaker by the day as the regular session lurches toward its last week.

"It is my belief that tax reform this session is now unlikely," Mitchell said. "But I believe that the debate that President McKay has started should continue."

McKay started the debate months ago, calling for sweeping changes to a tax code he said no longer works in a service-driven economy and is too vulnerable to periodic ups and downs.

The competing proposals differ in an important way. McKay's plan would automatically eliminate tax breaks unless the Legislature votes to re-enact them. Legislators would have to go on record favoring tax breaks for stadium skyboxes or tanning salons.

Mitchell's plan has no so-called sunset provision. It is nearly identical to a proposal by the influential business lobby Associated Industries of Florida.

So while Sen. Ken Pruitt, R-Port St. Lucie, embarked on a lonely mission to garner support for McKay's idea, Mitchell unveiled his at a press conference where he was accompanied by lobbyists for accountants, large and small corporations and TV stations, which aired hard-hitting ads for weeks at no charge attacking McKay's proposal.

Gov. Jeb Bush embraced Mitchell's alternative.

"I'm very supportive of it," Bush said. "It outlines a similar concept to what we've been advocating from the beginning: to review, but not sunset, exemptions, which would be disruptive to our business community."

Added House Speaker Tom Feeney: "We don't want a presumption that every major tax exemption is on the chopping block."

McKay's approach creates too much uncertainty, said Steve Birtman of the National Federation of Independent Business, a small-business trade group. "How does a business make long-range plans if they don't know if their exemption is in or out? If you were to sunset all of the exemptions at a certain time, it would be like a gun to your head."

McKay called Mitchell "pretty naive" if he thinks his proposal would meaningfully review tax breaks, and Pruitt said a tax review without a sunset provision means nothing.

Mitchell, a low-key, first-term senator who represents a sprawling district stretching from Tallahassee east and south to Citrus County, sounded very different a few days ago.

He told the St. Petersburg Times last week that he fully supported McKay's efforts to overhaul taxes, and that his rural constituents expected him to wipe out tax breaks for big business.

"One of the things people in my district are most upset about is special tax breaks for people," Mitchell said then. "We were sent up here to do the things our people expected us to do, not just get re-elected."

The Senate has drawn Mitchell a new district that would make him more vulnerable to a Republican, though he said the tax plan is unrelated to that.

Mitchell said he offered a compromise to keep the hope of tax reform alive. He spoke of the need to safeguard the state's business environment and remove tax exemptions without "cherry-picking."

The session ends a week from Friday with no sign of a resolution of the three top issues, the budget, redistricting and reorganization of the Cabinet. Senators are increasingly weary of tax reform.

"This is the point in the session where you're ready to go home. You want finality. You want closure," Pruitt said.

-- Times staff writer Lucy Morgan and researcher Deirdre Morrow contributed to this report.

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