09/25/2007
House Hikes Business Taxes; Garcia Services Tax Appeal Falls Flat
Both the House and Senate met Monday late into the evening to continue efforts to close the 2008 budget gap. Unable to get 56 votes from its own party to raise the income tax or institute a services tax, the Democrat-controlled House decided to hike taxes on business by voting to eliminate a number of tax exemptions provided for in current law. Calling them "loopholes," the list is basically the same one that Gov. Jennifer Granholm has been unsuccessfully trying to pass since she came to office. We have consistently opposed this backdoor attempt to hike business taxes.
On the Republican-controlled Senate side, Sen. Valde Garcia made a pitch to his majority caucus for his version of a services tax hike to raise revenue. Garcia announced on the Senate floor during Sunday session that he would be presenting his plan after he voted against $900 million in cuts proposed by Senate Republicans. However, reports are that his plan fell on deaf ears in his caucus and he was advised to give up on plans for a services tax. We'll continue to urge Senate members not to take action on the services tax shell bill HB 5198.
Also, the Senate Appropriations committee is scheduled to take up a number of fee bills this afternoon (pet shops, pesticide applications, securities, environmental protection fees, etc.). There is concern that efforts may be made to increase the fees on business in light of the current budget situation.
Time is running out for resolution to the budget by Thursday of this week, the deadline to avoid a partial government shutdown. Speculation is that the conference committee on HB 5194 (the income-tax hike shell bill mentioned in yesterday's update) could recommend an income tax rate of about 4.45 percent in return for a continuation budget that would buy lawmakers a few extra weeks to find a permanent budget solution.
Members are urged to continue contacting lawmakers and let them know your position on tax increases and a services tax.
As always, we'll continue the fight against tax increases and, in particular, any new services tax.
