Governor Rick Scott (R-Fla.) started the holiday season off on the right foot by unveiling a $79.3 billion budget proposal in November that includes $1 billion in tax cuts for Florida families and businesses. Gov. Scott’s “Florida First” budget plan is the first major tax cut proposal introduced in any state for fiscal year 2016-2017.
Gov. Scott introduced next year’s executive budget ahead of schedule. This stands in stark contrast to states like Illinois & Pennsylvania, where lawmakers have yet to approved a budget for the current fiscal year that began over five months ago.
While Floridians are fortunate to be governed by state lawmakers who have their fiscal act together (in addition to living in a state with no income tax), Illinois and Pennsylvania taxpayers currently face dysfunctional state governments with anti-competitive tax systems. In Illinois, Republican Gov. Bruce Rauner is contending with a Democrat-controlled legislature that wants to spend more than the government collects in tax revenue and is thwarting the Rauner’s efforts to enact two much needed reforms: changes to the collective bargaining process for government employee unions and prevailing wage laws that inflate the cost of government construction projects.
Meanwhile in the Keystone State, the only other state without a budget this year, Gov. Tom Wolf (D.) began his first year in office proposing a budget that would impose the largest tax hike in Pennsylvania history. By ignoring the fact that the state is in serious need of structural modification when it comes to pension reform, and that most Pennsylvanians want an end to the commonwealth’s government booze monopoly, Gov. Wolf’s budget was dead on arrival in the GOP-controlled House and Senate. Pennsylvania’s budget impasse now looks to continue well into the holiday season.
Both Illinois democrat legislators and Gov. Wolf should look to Gov. Scott and the Sunshine State Republican legislators for examples on how to pass a budget and how to spur economic and job growth. The first step is to cut taxes. During Gov. Scott’s time in office, he has been a strong advocate for taxpayers. In 2014 he cut $500 million in taxes, in June he cut $429 million in in taxes, and for the upcoming fiscal year, he wants to continue the tax cut trend by further reducing the tax burden on businesses, families, and individuals. If his budget is passed, he would save taxpayers over $84 million more than last year.
The second step is to ease the tax burden on businesses. Under Gov. Scott’s new proposal, the manufacturing industry would no longer pay a manufacturing sales tax and a manufacturing income tax. Florida retailers, which include small businesses, would also be exempt from paying tax on business income. And to further ease the squeeze these companies, Gov. Scott would cut the tax that unjustly targets small businesses—the commercial lease tax—which would save businesses $339 million annually.
Due to Gov. Rick Scott’s competitive tax code, the Sunshine State has attracted nearly 1 million jobs over the last 5 years. While this has been a great feat for Floridians, the governor wants to raise the bar again. This time he’s vying for Florida to become the number one state in job creation, a position that is currently held by Texas. In order to achieve this goal, Scott wants to allocate $250 million for the New Florida Enterprise Fund.
Furthermore ensuring that the tax burden is eased on individuals and families is an integral step for economic growth. If Governor Rick Scott’s budget were passed, students and families would also benefit from tax cuts. Gov. Scott has proposed extending the sales tax exemption on college textbooks, employing 10-day back-to-school sales tax holiday and a 9-day sales tax holiday for disaster preparation. Florida students are expected to save $46 million and families are expected to save an estimated $72.8 million for the fast-approaching fiscal year.
While Florida First is currently only a proposal, Pennsylvania and Illinois lawmakers would be wise to examine the impact Gov. Scott’s tax cuts for individuals, families, and companies, and spending restraint has had on the state. Currently the state’s general fund revenue in total surpasses this year’s recurrent budget by $3.4 billion and the state’s economy is increasing by over 2.7 percent. And although Florida has a booming economy, Gov. Scott is still looking for ways to improve the state.