Taxes

Legislature Passes $1.269 Billion in Tax Relief

This year’s tax relief package totals $1.269 billion and is focused on reducing taxes for families.  Most of the tax cuts are nonrecurring, only $300 million is recurring.  Most of the tax package is comprised of sales tax exemptions, both temporary and permanent.

The package contains two major FTW recommendations:

• Reduction in the Business Rent Tax from 5.5% to 4.5%. ($256 million), effective December 1, 2023.  The tax rate is still scheduled to be reduced to 2.0% in August 2024. 

• A 3-year freeze for local CST taxes.

A number of the provisions in the final package were in proposed by the both the House and Senate, and several were recommended by Governor DeSantis.  HB 7063 passed by chambers unanimously.  

Taxpayers will see six sales tax holidays, including two separate two-week “Back to School” holidays, permanent exemptions for baby and toddler products (including diapers), oral hygiene products, and one-year exemptions for Energy Star appliances and gas stoves and cooktops.  

The tax package contains numerous provisions.  For an explanation of all of them, see this.   For a complete list of the extensive array of items that will be exempt during the tax holidays, see this. 

Economic Development 

Property Insurance - SB 7052 is aimed at enhancing consumer protection by increasing state oversight and insurer accountability contains a number of provisions intended to increase consumer protection and insurer accountability in Florida.  There are new restrictions on insurers’ ability to cancel  a policy with an open claim.  The bill also increased fines against insurers, limits insurer executive compensation under certain circumstances, and requires justification and accountability when insurers amend insurance adjuster reports.

Insurance – SB 418 allows insurers to file personal lines residential property insurance rating plans based on windstorm construction standards, and revises the mandated deductibles that must be offered for hurricane loss, among other provisions. 

Education

Expanding School Choice – HB 1 will greatly expand the Florida Tax Credit Scholarship (FTC) and the Family Empowerment Scholarships (FES-EO), making it available to any student eligible to be enrolled in kindergarten through Grade 12 at a Florida public school. Parents would become eligible to use an empowerment savings account to customize their child’s education through the purchase of authorized expenses, including private school tuition; contracted services by a public school or school district, such as classes; and tutoring services. In the first year, there will be 20,000 Personal Education Program (PEP) scholarships under FTC. That number will increase by 40,000 students in each of the next three years. The bill also increases the number of students with disabilities served under the Family Empowerment Scholarship for students with disabilities (FES-UA) by increasing scholarship growth rates from 1 percent to 3 percent of Florida’s exceptional education students, annually.  While the FTC and FES-EO are available to all students, the bill keeps a “priority” for students with household income levels below 185 percent of the federal poverty level.  It adds a second priority for students with household income levels below 400 percent of poverty.  A priority of Speaker Renner, HB 1 was approved by both chambers and signed by the Governor early in the session.

EASE Grants — SB 1272 expands the Effective Access to Student Education (EASE) Grant Program, a student voucher program that supported 37,705 students with an award of $2,000 each during Fiscal Year 2022-23. Florida TaxWatch research has supported the use of EASE Grants.  Discussed in our report, every dollar invested in the EASE Program generates a return of $2.48 in tax revenues.  SB 1272 expand EASE grants to full-time degree-seeking undergraduate students enrolled at independent, nonprofit universities formerly eligible for the Access to Better Learning and Education (ABLE) Grant Program—a program repealed by the Legislature in 2021—or enrolled at a for-profit, accredited college or university located in Florida that meet the criteria. 

DID NOT PASS

EASE Grants - HB 1247 proposed tying institutional eligibility for participation in the EASE program, and the amount of money a school can receive, to performance benchmarks. For minimum funding, this bill would require institutions to meet or exceed three out of five minimum benchmarks for the following metrics: access rate, affordability rate, graduation rate, retention rate, and postgraduate employment or continuing education rate. If this bill had passed, students at seven schools would lose EASE grant vouchers, and 12 of the 27 remaining eligible schools would be listed as Tier 2, with students at these schools receiving smaller vouchers than the students at other EASE eligible schools. SB 1247 died on the calendar.

Environment

PASSED

Trails and Wildlife Corridor – SB106 appropriates $200 million for SUN Trail projects with a focus on coordinating with the Florida Wildlife Corridor, which was provided $300 million for land purchases by the 2022 Legislature. The bill also increases required annual trail funding from $25 million to $50 million.  A priority of Senate leadership, the SB 106 passed the full chamber unanimously the first week of session and has been signed by the Governor.

DID NOT PASS

Everglades Protection Area – SB 192 would have created a development-free buffer zone around the Everglades. It required any proposed comprehensive plan or plan amendment by Miami-Dade County or its municipalities that applies to land within, or within 2 miles of, the Everglades Protection Area to be reviewed pursuant to the state coordinated review process.  The Department of Environmental Protection, consulting with the Department of Economic opportunity and Indian tribes would have performed the review. If the project is found potentially damaging, the local government would have to modify the project to eliminate the impact.  If that could not be done, the project would be scrapped.  SB 192 was approved by the full Senate and but was not taken up by the House.

Smart Justice/Public Safety

PASSED 

Problem Solving Courts - SB 508 expands eligibility for these pretrial intervention programs, creates consistency within the criteria of the programs, and revises data reporting requirements. Florida TaxWatch has supported creation and expansion of drug courts and other "problem solving" courts, which are pre-trial intervention court programs that afford a defendant the opportunity to participate in getting the help he or she needs and avoid a criminal conviction.  The bill also revises eligibility requirements for voluntary admission into certain substance abuse programs and authorizies courts to determine the length of time a person may be admitted into a certain program. 

Juvenile Justice – SB 7014 will transfer the responsibility of educating students in residential commitment programs from school districts to a new, statewide Florida Scholars Academy operated by the Department for Juvenile Justice. The  Academy will operate similarly to a self-contained district—led by a superintendent and a five-person board.  The mission of the Academy is to "provide a free and appropriate high-quality education for eligible students within the juvenile justice system.” It will provide greater access to secondary and postsecondary educational opportunities, including industry-recognized credentials. The bill also appropriates $12 million in recurring general revenue for startup costs.  

Automatic Sealing of Criminal Records - SB 362 provides that that a criminal history record is eligible for automatic sealing when an indictment, information, or other charging document was dismissed as to all counts, or a not guilty verdict was rendered as to all counts.

Court-Ordered Expunction of Criminal Records - HB 605 removes the one-time limitation on court-ordered expunction for certain offenses committed by minors.

Health & Aging

PASSED 

KidCare Expansion (HB 121) – Florida’s KidCare program will be expanded for the first time since it was created in 1996.  KidCare provides subsidized health insurance to children whose families earn too much to qualify for traditional Medicaid. Families pay a small monthly premium ($15-$20).  HB 121 would expand eligibility from 215 percent of the federal poverty level to 300 percent.  A family of four could qualify with income as high as $83,250, up from $64,500.  The new state budget includes $21 million to pay for the expansion. Like other Medicaid expansions, the federal government provides an increased match to help pay for the additional enrollees.  As Medicaid “unwinds” after the enhanced coverage during the pandemic, as many as 1.75 million Floridians will lose Medicaid benefits.  Florida TaxWatch commends Speaker Renner for making this a priority to ensure more children keep their health insurance. 

Telehealth –HB 267 helps to expand the use of telehealth by including audio-only phone calls in the statutory definition.  Florida TaxWatch research has recommended expansion of telehealth to improve access and reduce costs.   In addition, SB 218 passed which will allow licensed genetic counselors to use telehealth. Previous, Florida was the only one of 31 state that license genetic counselors that did not authorize them to use telehealth. 

Pharmacy Benefit Managers (SB 1550) - The Prescription Drug Reform Act is an attempt to “put some guardrails” on pharmacy benefit managers (PBMs) to increase transparency, patient choice, and, hopefully, reduce costs.  Drug manufacturers are now required to disclose reportable prescription drug price increases so the state can publish them on a website and PBMs are required to pass on all manufacturer rebates they receive to the plan or program.  The bill also prevents “steering”, where PBMs require that patients use pharmacies affiliated with them or that they receive drugs through the mail.  

Government Efficiency and Accountability

PASSED

Government Official Travel Records - SB 1616 exempts travel and security records from the state's public records law.  This exemption applies to the Governor, the Governor’s immediate family, visiting governors and the governors’ families, the Lieutenant Governor, a member of the Cabinet, the House Speaker, the Senate President and the Chief Justice of the Supreme Court, or for persons for whom such services are requested by these officials. The bill is retroactive, applying to all such records before or after the bill becomes law.  The exemption will be repealed on October  2, 2028, unless reenacted by the Legislature.

Non-profits Contracting with State - SB 242 requires any nonprofit organization that receives state funds through a contract with the State of Florida to post documents that disclose the amount of state funds it used for the remuneration of its board of directors or officers to it website.  The state entity issuing the contract must post the documents to the Florida Accountability Contract Tracking System.

DID NOT PASS

Supermajority to Amendment Constitution - Florida already requires a three-fifths (60 percent) supermajority vote to amendment the State Constitution. HJR 129 was a proposed constitutional amendment to raise that threshold to two-thirds (66.7 percent) of voters voting in the elections.  The resolution passed the House, but the Senate did not take it up.

State Rulemaking -  HB 173 would have amended the Administrative Procedures Act to increase transparency in rulemaking, provide a process for agencies to reduce  unnecessary rules, require certain agencies to review coastal permitting and other permitting processes, and require  that regulatory cost impacts are considered for every rule.  The bill made it to the House floor.

Budget

House and Senate budget proposals released

The Legislature is also moving very quickly on the new state budget.  Both chambers’ appropriations bills were released this week.  The House version carries a price tag of just under $113.0 billion, while the Senate proposes $113.7 billion.  This compares to current spending of $110.2 billion and the Governor’s recommendation of $114.8 billion.  

The two chambers are remarkably close on many of the details, but there are differences to be worked out.  

State employee pay raise - The Senate provides $513 million for a 3 percent raise for all employees and an additional 5 percent for job categories including accountants, auditors; IT, lab techs, attorneys, and nurses.  The House doubles that, providing $1.1 billion for a 6 percent across-the-board increase and additional pay for corrections workers.

Hurricane Relief - The Senate creates a $350 million Hurricane Recovery Grant Program for the mitigation of local and county revenue losses and operating deficits; infrastructure repair and replacement; and debris removal.   The House offers $25 million.  Both budgets provide $106 million for hurricane-related beach renourishment.

School Funding - The House and Senate both put an additional $2.1 billion into the public school funding formula, increasing per student spending by approximately 5 percent.   $1 billion of the increase is courtesy of local property owners, as the Required Local Effort millage rate is not rolled-back, despite to large increase in taxable value (12%).

Paydown Debt - Florida TaxWatch has recommended that the state use some of the excess non-recurring revenues available to retire state debt ahead of schedule to cut interest cuts.  Both chambers want to do that, the House provides $137 million and the Senate commits $400 million.

Budget Stabilization Fund -  The House would transfer $1.3 billion from General Revenue to the BSF, while the Senate would transfer only $500 million.

 Member Projects - The budgets are also chock full of local member-requested projects, more than 1,000 projects in each budget.  

New General Revenue estimates add $7 billion for the next budget

In what has been a regular occurrence, the Florida General Revenue (GR) Estimating Conference significantly increased the estimate of the amount of GR that will be collected. This is the sixth conference in a row that has produced a rosier revenue forecast. The latest estimating conference, held March 13, increased the estimate for FY2022-23 and FY2023-24 by a total of $7.06 billion. This is more good news for legislators who are currently in the process of developing the next state budget (FY2023-24.) Despite a gloomier new national and state economic forecast, which includes a mild recession and continued worries including inflation and housing, GR collections have exceeded expectations by almost $3 billion in the first six months since the August 2022 estimates. Actual collections have now bested estimates for 30 consecutive months. The forecast continues this through the last four months of the current fiscal year. As a result, the GR estimate for FY 2022-23 was increased by $4.27 billion. And while the conference is predicting a “downshift” next year that will reduce collections from this year’s windfall level, the new estimate for FY2023-24 was still increased by $2.78 billion from the August estimate.