Originally published Sept. 18, 2020
In April, after it had been forced to shut down by the coronavirus pandemic but before it began laying off workers en masse, Universal Orlando’s hotel business claimed more than $250,000 worth of tax breaks through a state program meant to help communities struggling with chronic poverty and crime.
It was the 22nd time in the last 20 years that either Universal Orlando or its hotel affiliate have tapped into the high-crime incentive program. Records show that Universal and its hotels have now claimed nearly $17.4 million in tax breaks through the program — half of the $34.8 million ever awarded.
Some state lawmakers have tried in recent years to reform the program, which was initially championed by legislators hoping to help places like Orlando’s majority Black neighborhood Parramore. But now, rather than reform it, a group of business leaders and lobbyists want the Republican-controlled Florida Legislature to expand it — casting the high-crime tax breaks as a tool to help businesses battered by the virus-induced recession.
Expanding the program is one of nearly 30 recommendations made last month by a “COVID-19 Taxpayer Task Force” assembled by Florida TaxWatch, a business-funded advocacy group in Tallahassee. The group also wants lawmakers to expand or enact a host of other business tax breaks, from cutting the state’s corporate income tax rate to subsidizing everything from manufacturers to movie productions.
TaxWatch President and CEO Dominic Calabro called the recommendations “thoughtful policy recommendations ... focused on protecting the well-being of the taxpayer and positioning Florida for a strong and sustained recovery.”
“The success of Florida’s economy may hang on the decisions made in the next several months, and it is our sincere hope that the Governor, Cabinet, Legislature, state agency leadership and local officials take the following recommendations as a starting place to determine the best course of action on tax policy for the state moving forward,” Calabro and Task Force Chairwoman Karen Lake, a former state auditor who is now an accountant for private clients, wrote in a letter accompanying the report.
But some other tax experts say Florida should take the opposite approach.
Unless the federal government comes through with far more aid for state and local governments, states like Florida will have to make some hard choices in the next few months, said Darien Shanske, a law professor and state and local tax expert at the University of California, Davis. And rather than raising taxes on consumers or small businesses — or cutting programs that help workers and families — Shanske said states should focus on raising revenue from larger businesses.
That includes suspending or repealing tax credits that primarily benefit companies like Comcast Corp. — the cable and entertainment giant that owns Universal Orlando and turned a $3 billion profit during the second quarter, despite the coronavirus pandemic.
State economists expect Florida will face a budget deficit of more than $5 billion over the next two years. How best to close that gap — while helping the people most hurt by the economic collapse and rebuilding the state' economy — will be the defining challenges facing Florida lawmakers following the November elections.
“We have a shortfall. It’s going to hurt somehow. And the question is, should it hurt K-12 education? Should it hurt emergency first responders? Core social-welfare programs?” Shanske said. “Where could it be borne best?”
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