Citing hard times, state legislators gouged Florida’s drivers four years ago, hiking the costs of renewing driver licenses and license plates by more than a third. Since the state was facing multibillion-dollar budget shortfalls and layoffs prompted by the recession, the decision was acceptable at the time.
But the recession is over, and the state’s budget is growing again. It is time to start rolling back these artificially high automobile fees.
The Florida Senate decided last week to do that, voting unanimously to lower car registration fees by $12 per vehicle next year. The Senate proposal, from Sen. Joe Negron, R-Stuart, would offset the lost state money by ending an unnecessary tax credit that has been subsidizing insurance companies for decades.
This is an utterly sensible thing to do, but the two chambers can’t agree. Even as the Senate was approving broad relief for drivers, the House last week was being stingier.
The House version, which a key committee passed Friday, would save drivers just $2.40 per year in the first year. Reducing vehicle registration fees by $12 would take five years to phase in. And rather than offset the lower fees by ending a handout for the insurance industry, the House plan would eat into the state’s savings – to the tune of $224 million a year once the reduction is fully implemented.
There is no good reason not to end this handout to the insurance industry, which gives insurance companies a tax credit equal to 15 percent of the amount they pay in employee salaries in Florida. Put in place in 1987 as a job-creation measure, the tax credit has long outlived its use and now serves only to subsidize long-profitable insurance companies. Getting rid of it would bring the state an extra $250 million a year, more than enough to offset large reductions in driver fees.
But House leaders appear far more interested in appeasing the insurance industry, which is running TV ads across Florida calling for its tax break to be preserved. Rep. Steve Crisafulli, R-Merritt Island, a future House speaker, called getting rid of the tax credit tantamount to “taxing job creators.”
But removing a tax credit that no longer serves a specific purpose simply distributes the state’s tax burden more fairly. As Sen. Negron correctly said, the credit is a subsidy “for an industry that is doing very well.” Indeed, the House’s reluctance to touch it shows that the industry is doing far better than Florida’s drivers.
for The Post Editorial Board