Florida drivers would get a break — a $12 cut in car registration fees — under a measure unanimously approved by the state Senate Wednesday.
The state would make up the lost revenue – between $220 million and $230 million – by doing away with a decades-old tax break to insurance companies.
The proposal would:
- Cut $5 tax on new vehicle registrations in half, to $2.50.
- Decrease from $1.50 to 50 cents the fee charged for reflective material on tags and stickers.
- Cut license tax surcharges from a total of $9.50 to $3.
- Cut the validation sticker service charge from $3 to $1.
In all, the bill would result in about $250 million going from insurance companies “into the pockets of hardworking Floridians,” its sponsor, Senate budget chief Joe Negron, said.
Insurers who pay a state tax on insurance premiums have been getting a rebate worth 15 percent of the salary paid to their workers. Negron told the chamber that insurance companies have prospered since then and that it’s no longer needed. The money instead should be used to reduce vehicle fees that lawmakers had increased in 2009 as part of a budget-cutting exercise prompted by a prolonged dip in the state’s revenue collections.
“I want them to be prosperous so they can collect premiums and pay claims,” Negron, R-Stuart, said of the insurers. “But in looking at this tax break… that has been worth $3.34 billion that we have subsidized the labor costs of the insurance industry…. But as we sit here in 2013, I personally believe… we should take this opportunity… to do something for the men and women we represent.”
Insurance and business lobbyists opposed the measure, suggesting that doing away with the tax break could chase companies away or keep others from relocating in the state.
But Sen. Jeremy Ring, a Margate Democrat, who described lobbyists’ rhetoric as “there’d be Armageddon if this passed,” said “it’s nice to finally call a bluff.”
But Sam Miller, executive director of the Florida Insurance Council, said the tax credit has helped produce jobs.
“It is not clear that repeal of the credit won’t endanger job creation. The state should move cautiously and be sure,” Miller said.
The Associated Press contributed to this report.