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The Senate leader targets some services and online sales, warning of an economic crunch.
By TIM NICKENS
© St. Petersburg Times, published June 14, 2001
ST. PETERSBURG -- Calling Florida's tax structure a "horse-and-buggy" approach to a technological age, Senate President John McKay on Wednesday made his long-shot pitch to overhaul the system.
The Bradenton Republican warned more than 120 members of the Suncoast Tiger Bay Club that the state's tax structure is not designed for an economy that is increasingly dependent upon services and technology rather than the sale of goods. He said the time to address the issue is now, not when the state faces a more severe economic crunch.
"We need to be prepared for a crisis," McKay said in a speech at the Bayfront Center. "We don't need to react to one."
The Senate president's proposal is still evolving. He talked of extending the sales tax on goods to some services, and of Florida's failure to collect sales taxes on many purchases made over the Internet.
The last time the Legislature approved major tax reform was in 1987, when the sales tax was extended to legal fees, advertising and many other services. But the controversial services tax was repealed after just six months, and lawmakers replaced the revenue by raising the sales tax on goods.
McKay said his proposal will be different because it would broaden the tax base without raising additional revenue for the state. He said legislators also erred in the '80s by failing to build public support for tax reform before voting for it.
But the questions that McKay fielded underscored the challenges he faces. Some questioners pushed him to embrace a state income tax, which is banned by the state Constitution and would require voter approval. Others expressed skepticism about extending the sales tax to services such as accounting.
McKay said it would be pointless to advocate an income tax because it would be defeated by voters. He questioned whether accountants or lawyers would lose business if their clients were forced to pay sales tax on their services.
The road is even tougher in Tallahassee. Neither Gov. Jeb Bush nor House Speaker Tom Feeney have expressed interest in pursuing tax reform in 2002, an election year that also features the redrawing of legislative and congressional districts.
Responding to other questions, McKay accepted responsibility for inserting a provision into the state budget that would have forced Leon County to lose road money if it did not remove speed bumps on a road that leads to the area's airport. He offered no apology.