TALLAHASSEE, Fla. — Florida's House of Representatives announced Wednesday they are proposing what they're calling "the largest tax cut in state history."
In remarks to the House Chamber in Tallahassee, Speaker Daniel Perez, R-Miami, said they want to cut the sales tax rate from 6% to 5.25%.
Perez said the rate cut would deliver nearly $5 billion in annual savings to Florida residents.
"If successful, Florida will become the only state in the nation to permanently reduce its sales tax," Perez said.
He went on to say that the state government not only has a "spending problem" but a "recurring spending problem."
"We have forgotten a fundamental truth — this money isn't ours," Perez said. "Tax dollars don't belong to the government, they belong to the people."
WPTV reporter Zitlali Solache spoke with Jared Walczack, vice president of the State Project's Tax Foundation. He said lowering the sales tax can be good for taxpayers, but it needs to be sustainable.
"Five billion is a big cut," Walczack said. "That's more than about two years of revenue growth in the state, so there needs to be a way to pay for this, and that's really going to be a question lawmakers have to ask."
This move comes amid proposals to either reduce or eliminate property taxes in Florida.
“Lawmakers would be wise to focus on sales tax rather than property tax because, actually the property tax has less distortion of the economy or less impact on growth than the sales tax," Walczack said. "If you had to cut one, you should cut the sales tax.”
Walczack adds that items like electronics and household items are subject to sales tax, leaving shoppers like Sydney Lint eager to save money.
"Prices have been high, so now that they're going down, that is better for everybody," Lint said. "I love shopping, so any excuse to shop more — if the prices are down, I'm going to be shopping more for sure."
WPTV spoke recently to the Florida Policy Institute, which said that if property taxes were eliminated, the sales tax rate would actually have to double to 12% to make up for the loss in revenue.
Below is the full text of Perez's remarks regarding the proposal:
"This session we have focused on restoring the institutional role of the Florida House of Representatives while renewing faith with our values and ideals. In the past, this House has justifiably called out local governments for misspending and mismanagement. We have taken special districts to task for misusing public money. We have railed against the excesses of the Federal government.
But we have been reluctant to turn our gaze on ourselves and hold state government to those same standards. As I shared with you both at Organization Session and on Opening Day, State government has a spending problem. More importantly, we have a recurring spending problem. Although member projects gain the most attention because of the veto process, the truth is that member projects are non-recurring appropriations. They are irrelevant and incidental to the true growth of the budget.
Our problem is not that we buy too many non-recurring projects, it is that we cannot resist spending every single dime of recurring revenue. We pile more money on programs that can’t even manage to spend the money they already have. The beneficiaries of the state budget are the endless string of lobbyists and vendors who always have some shiny new thing for the state to buy that won’t actually improve the lives of Floridians.
We have forgotten a fundamental truth – this money isn’t ours. Tax dollars don’t belong to the government, they belong to the people.
Several weeks ago, I challenged our budget subcommittees to really dive into their spreadsheets, to ask the hard questions, and find real savings. I have been incredibly proud of the work that all of you have done. Under the leadership of Chair McClure and subchairs Lopez, Busatta, Persons-Mulicka, Esposito, Andrade, Snyder, Maney, and Shoaf, we have generated meaningful dialogue around the critical issues in each budget silo.
This week, the budget subcommittee chairs have been sharing the results of that work by unveiling their spreadsheets, which will be compiled and published on Friday in the House’s proposed General Appropriations Act.
Members, the proposed House GAA will be historic. Our budget will not only be lower than the Governor’s proposed budget, it will also be lower than the budget passed by the Legislature last term. For the first time since the Great Recession, we will roll out a budget that actually spends less money than we did in the prior fiscal year.
Of course, the special interests will say the sky is falling and the world is ending. But it won’t and it’s not. They have lost sight of the difference between our state’s needs and their wants.
We cannot spend our way out of a spending problem. We must remove the temptation to spend. I will be asking Chairman Duggan and the Ways & Means Committee next week to produce a committee bill to permanently lower the state’s sales tax by .75%, which would bring the state general sales tax down from 6% to 5.25%, which will result in a tax cut for Floridians totaling almost $5 billion dollars per year.
This will not be a temporary measure; a stunt or a tax holiday. This will be a permanent, recurring tax reduction.
This will be the largest state tax cut in the history of Florida.
If we are successful, we will become the ONLY state in the history of the United States of America to permanently reduce its sales tax.
We often talk about how to improve affordability in Florida, and our strategies usually involve spending money on more government programs. But this year, we’ll try a novel concept – and make Florida more affordable by giving the people of Florida their own money back to them."
