Senate Cool To Tax Changes For Hospitals, Charter Schools

The Florida Senate could eliminate controversial proposals about charter schools and hospitals from a tax package that was approved last week by the House. 

Sen. Kelli Stargel, a Lakeland Republican who is overseeing tax negotiations for the Senate, said Wednesday the Senate’s goal is to keep the package “to the ideas of what a tax package has historically been.”

The House last week voted 69-44 to approve a $102.4 million package (HB 7123) that included a three-day back-to-school tax “holiday” in early August and a seven-day tax “holiday” on hurricane-preparation supplies. The proposal also seeks to reduce a commercial lease tax rate from 5.7 percent to 5.35 percent.

But in budget negotiations, the House and Senate decided to set aside $90 million, instead of the $102.4 million, for tax cuts. The Senate is expected to take up a counterproposal to the House bill on Thursday, Stargel said.

“Our plan is to get something done and send it over there and have a package be finished that focuses on the people of the state of Florida, focuses on making sure we get tax relief, the things that a tax package is intended to do,” Stargel said.

Along with the tax holidays and the cut in the commercial-lease tax, the House proposal also would amend guidelines for hospitals to qualify for a charitable tax exemption.

Justin Senior, chief executive officer of the Safety Net Hospital Alliance of Florida, warned Wednesday of a “new tax on children’s hospitals that would result in devastating funding losses.”

“We understand there is a push in the Legislature that would essentially target and tax children’s hospitals under the guise of taxing hospitals that don’t perform a certain amount of charity care,” Senior said in a statement. “Florida’s children’s hospitals serve all families and provide world class care to everyone --- but this tax punishes them for serving a significant number of low-income families enrolled in Medicaid” and the Children’s Health Insurance Program, which provides coverage to families that make too much money to qualify for Medicaid.

According to a staff analysis of the bill, non-profit hospitals would be required to document the value of charitable services they provide, and their current charitable tax exemption would be limited to the value of that charity care.

The House package also has drawn controversy because it includes charter schools in the distribution of increased property-tax money raised through local referendums. Such referendums have been approved in about 20 counties, and critics of the House bill say at least some local referendums were designed to help traditional public schools, not charter schools.

House Ways & Means Chairman Bryan Avila, a Miami Springs Republican sponsoring the tax package, has argued the proposal addresses a 2017 court ruling that required Indian River County to include charter schools in money raised from a local referendum. Also, he has pointed to recently filed litigation about a Palm Beach County referendum and language in a Miami-Dade referendum.

“You have certain counties that have completely excluded charter schools, you have some that left it so vague that no one really knows,” Avila said last Thursday. “There’s a multiple set of districts that have really done several different things and have provided no uniformity. And so, what we’re doing with this language is provide that clarity.”

But as the Senate puts together its plan, Stargel said Wednesday “at this point” the school referendum and hospital language “are not being considered. But we’ll see where it goes.”

While Senate Appropriations Chairman Rob Bradley and House Appropriations Chairman Travis Cummings agreed this weekend to cap the tax package at $90 million, they could only agree on the two sales-tax holidays. That has spurred negotiations on other possible parts of a final package.

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