Januaryy 20, 2005
On Tuesday, January 18th, Governor Jeb Bush and Lt. Governor Toni Jennings unveiled the Executive Budget Recommendations for Fiscal Year 2005-2006. The Bush/Jennings proposed budget is $61.6 billion, an increase of $985 million or 1.6% over last year’s budget. The business community will find tax eliminations and tax incentives will help the business climate in Florida continue to grow. Here are the tax relief recommendations by the Governor:
- Intangibles Tax phase-out over two years: Tax savings of $132.2 million the first year, $293.8 million recurring, 320,000 taxpayers removed from the rolls.
- Sales Tax Holiday on clothing and books valued at less than $50, and school supplies valued at less than $10: one-time savings of $35.5 million.
- Beverage "By-the-Drink" Tax repeal: $47.2 million in annual savings.
- Substitute Communications Systems Tax repeal: avoids large, unintended tax burden on broad spectrum of Florida businesses.
- Research and Development (R&D) equipment sales tax exemption: $33.7 million in annual cost reductions to encourage location of R&D activities in Florida.
- Manufacturing Machinery and Equipment sales tax exemption increase for expanding producers: $34.8 million in savings to encourage retention and expansion of manufacturing activity in Florida.
- Community Contribution Tax Credit extension for an additional 10 years: $10.0 million annually for affordable housing and other community improvement projects.
- Hydrogen Technology tax incentive package: $2.1 million targeted for clean hydrogen technology uses and production in Florida.
Associated Industries of Florida (AIF) agrees with the Bush/Jennings philosophy that “Fiscal discipline affords the opportunity for a continuing program of tax relief for Floridians. Tax dollars do not belong to government; they belong to taxpayers. To the extent possible, these resources should be left in the hands of those who earn it, to be more fully enjoyed and productively used. Statistical research suggests that lower taxes can enhance the growth prospects for a state’s economy and a state’s ability to pay for priority public services. The Bush/Jennings budget proposes $285.0 million in tax relief for Fiscal Year 2005-06.”
Another important part of the Bush/Jennings proposal is to promote economic diversification. The total amount of economic development incentives is $37.9 million an increase of 6% from last year. Here is a breakdown of the incentives:
- $12.0 million for the Quick Action Closing Fund that allows the Governor to provide incentives on economic development projects that require immediate action.
- $24.0 million for the performance based Qualified Target Industry tax refund program which provides tax refunds to eligible new or expanding corporate headquarters, research and development facilities, and businesses in key industrial sectors.
- $400,000 for the Qualified Defense Contractor Tax Refund Program to provide tax refunds for jobs created or saved by converting defense jobs to civilian production, acquiring new defense contracts, or consolidating contracts
- $1.0 million for Brownfield Redevelopment Bonus Refunds to help communities and job-creating businesses redevelop distressed areas. This is a significant increase over historical funding levels in order to allow bonuses to be paid to certified Qualified Targeted Industries participants for redevelopment and creating jobs in Brownfield areas.
- $500,000 in new funds for the Life Science Industry in order for Florida to be more competitive in the biomedical and life sciences sector.
Additional funding has been allocated to the following public/private partnerships to stimulate growth:
- VISIT FLORIDA - $24.7 million - an increase of almost 20 percent from current year funding to strengthen efforts to attract a record number of visitors to Florida through marketing, sales and visitor services.
- Enterprise Florida - $15.0 million - an increase of 36 percent from current year funding to assist in the state’s efforts to diversify our economy and provide good jobs with high wages.
- Rural Infrastructure/Community Development - $4.0 million - an increase of almost 16 percent over current year funding to assist rural and fiscally distressed communities through grants and loans for infrastructure and community development.
- International - $3.7 million - an increase of almost 157 percent over current year funding to promote international business relationships.
- Film and Entertainment - $5.1 million - an increase of almost 79 percent over current year to foster the reputation and growth of the film and entertainment industry.
AIF agrees with the Bush/Jennings theory that a thriving economy will encourage high quality jobs with opportunities for all Floridians to earn high wages. With their combination of promoting tourism and international business to come to Florida along with additional funding of Enterprise Florida and infrastructure, Florida will continue to have a healthy economy. Florida continues to lead the nation in job growth and should maintain its lead with these incentives and additional funding.
Transportation is another important part of the Bush/Jennings proposal. They are recommending a $6 billion investment, a 5% increase from last year:
The Fiscal Year 2005-06 Work Program includes:
- $2.9 billion for continued development of the Strategic Intermodal System: The Strategic Intermodal System responds to key trends that shape the state’s economy – strong population and economic growth, a shift toward regional economic centers, lagging economic performance of rural areas, a shift toward service and information industries and continued concerns about growth management and environmental quality.
- $2.0 billion to maintain operate and preserve the existing transportation system
- $30.3 million for rural county programs (Small County Resurfacing Assistance Program – $25.0 million and the Small County Outreach Program – $5.3 million)
With this proposed $6.0 billion Work Program, $2.1 billion will be awarded for contracts and establishes a strong foundation for continued stabled awards; 211 new lane miles constructed and 3,212 existing lane miles will be resurfaced, reconstructed, or rehabilitated.
AIF agrees that an investment like the one proposed in transportation will create “… a business climate conducive to economic opportunity, while protecting our environment and enhancing our quality of life.”
Education is still a priority for Governor Bush and Lt. Governor Jennings. The business community will benefit with the Bush/Jennings proposal of $1.2 billion for workforce programs at school district technical centers and community colleges. This is an increase of 9.4 percent or $102.8 million from the current year. Within this additional funding there is a new $24.7 million allotment for the “Jobs for Florida’s Future Program,” which may be used for high-skill/high-wage or high-demand occupations.