Sen. Joe Negron's plan is to eliminate a 33-year-old tax break for insurance companies and apply it to a fee reduction for Florida motorists. File photo by John Iarussi.
A plan to pay for a reduction in vehicle and driver license fees by eliminating a 33-year-old tax break for insurance companies worth $220 million each year passed through the Senate Appropriations Committee on Thursday by a unanimous vote.
SB 7132 would do away with a tax credit that pays insurance companies 15 percent of their Florida-based workers’ salaries and also cut motor vehicle registration fees by $12. State economists have not reviewed the proposal, but staff analysis of the bill projects the fee decrease will cost $225 million in revenue and the elimination of the insurance tax credit will net $220 million.
Insurance company lobbyists said the tax credit supports jobs in the state and would discourage hiring and attracting companies to Florida.
“There have been some regional offices that have moved to Florida or that have been maintained in Florida as a result of this incentive,” said Michael Carlson, a lobbyist for the Personal Insurance Federation of Florida, an industry group representing State Farm and Allstate.
Sen. Joe Negron, R-Stuart, unveiled the plan last week and noted State Farm made $3.2 billion in profit in 2012 and its CEO received $9.6 million in compensation. He doubts the elimination of the tax credit will lead to an exodus of insurance jobs.
“This idea that if we decide to redeploy a tax incentive to our constituents that the apocalypse is going to occur, I don’t think the facts support that,” said Negron, who chairs the committee.
The plan is in keeping with ideas emerging from the Senate to find old tax credits or incentives before writing new breaks for specific industries into the tax code.
Sen. Andy Gardiner, R-Orlando, warned lawmakers every industry will try to protect their favored tax breaks, but credits and incentives aren’t meant to be permanent.
“At what point has an incentive done what we intended it to do and we as a Legislature say that was it?” Gardiner said.
Reporter Gray Rohrer can be reached at [email protected].
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