Opinion: Indefensible tax cut

Dollar for dollar, nothing pays richer dividends than education. Yet many of Florida's public schools are shutting their doors this summer, forcing children whose families can afford it to look to private schools to make up courses they have failed. Meanwhile, college students who earned Bright Futures scholarships will have to pay their own way this summer or postpone their studies. And for all the hoopla over Gov. Jeb Bush's proposed "billion-dollar" budget increase for education, it will barely cover growth and inflation. So much for catching up.

These are some of the many false economies resulting from the state's revenue deficit. In another, legislators are likely to enforce stiff "spend-down" requirements on clients of the medically needy program, which helps uninsured people who have severe health problems that would otherwise make paupers of them. Under the most liberal proposal, they would be allowed to keep only $580 a month for food, shelter, clothing, transportation and all other nonmedical expenses.

The Legislature also is considering, and is likely to pass, a tax break for corporations that would cost the treasury $396-million before it expires at the end of the 2004 fiscal year, 26 months from now. To say that's wrong is to put it kindly. In the context of some of the budget cuts already made or contemplated, this tax break is morally indefensible.

It comes as a consequence of the so-called economic stimulus package that Congress passed, which allows corporations a "bonus depreciation" of 30 percent of the cost of new equipment purchases. This will cut federal taxes by $97-billion before it expires after three years. But because nearly every state is in the habit of calculating its taxes on the federal code, the states could lose an additional $14-billion. Whether Florida will suffer its loss automatically depends on a legal technicality over which the House and Senate disagree. However, the budget compromise that leaders struck in advance of the special session contemplates the extra tax cut, and legislators will vote on whether to approve it.

It strains belief that corporations need that money more than Florida's schools and medically needy people do. Trying to make a case for the corporations, Florida TaxWatch issued a press release lamenting that businesses otherwise "would have to keep two sets of books while tracking two different tax systems." That is, of course, a lot easier than it sounds. It involves only two different computer calculations. TaxWatch also complained that Florida would lose competitive advantage to states that go along with the federal cut. This is hard to take seriously, given that the tax cut is temporary.

According to the Center on Budget and Policy Priorities, at least eight other states have decided to exclude the bonus depreciation from their corporate tax codes. Florida should do so also.

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