on March 22, 2013 by admin in Insurance Industry, Comments (0)

Negron: Eliminating insurance industry tax credit would allow cut in motorist fees

Republican Sen. Joe Negron of Stuart said Thursday he wants end a tax credit for the insurance industry and use the money to roll back increases in fees for driver licenses and auto tags that the state adopted four years ago.

Negron, the Senate budget chairman, said the $220 million in savings the state would earn by erasing the insurance industry credit would allow lawmakers to cut the 2009 driver license and auto registration fee increases by half.

In an attempt to balance the recession-ravaged state budget in 2009, lawmakers boosted the cost of just about every motor vehicle fee, including a 35 percent increase in annual tag fees that ranged from $5 to $11.40, depending on a car’s weight. The initial vehicle registration fee more than doubled, going from $100 to $225. The cost of an initial driver’s license went up from $27 to $48 and a renewal increased from $20 to $48.

The increases were part of a $2.2 billion package of tax and fee hikes that included an increase in the state’s cigarette tax.

Negron’s proposal Thursday came after his budget committee spent weeks reviewing tax and spending policies. When the panel unearthed a 1987 credit given Florida insurance companies for the salaries they pay employees, Negron saw green.

The 15 percent tax credit was aimed at giving insurers an incentive to open offices in Florida. But Negron said the industry now looks “robust.”

“My priority is to get money to our constituents and not subsidize an industry that is doing very well,” Negron said. He said legislation would be ready next week for the committee to review.

“Over time, I hope we can eliminate that fee increase,” he said.

This marks the second tax break this year that the Senate has targeted potential elimination. The Senate is also proposing eliminating a tax break for banks to help pay for economic incentives that would be used to renovate Sun Life Stadium in South Florida.

Negron has defended the potential elimination of incentives or tax breaks, saying the Legislature needs to eliminate outdated incentives before adopting new ones. The problem for Republicans is any vote to eliminate a tax break could bring criticism that they are actually raising taxes.

But Senate President Don Gaetz agreed it is time to cut the fees.

“During a difficult budget year, the Legislature made the hard choice to increase certain fees associated with driving a vehicle in lieu of raising taxes, or taking draconian cuts to critical state services,” Gaetz said. “However, times have changed and it is time that we reprioritize and evaluate ways to keep more money in the pockets of hard working Floridians.”

Article source: http://www.palmbeachpost.com/news/news/state-regional-govt-politics/negron-eliminating-insurance-industry-tax-credit-w/nWzf6/

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