Nov 3, 2011

Adding sales tax to items you buy online could help the agency for persons with disabilities avoid more cuts.

No leadership on shortfall
By TBO.COM Published: November 02, 2011
Once again, Florida state government is facing a major budget deficit — as much as $2 billion next year. And once again, the Republican majority in Tallahassee — Senate President Mike Haridopolos especially — is showing little leadership in solving the fiscal crisis.
While there is no avoiding painful budget cuts, no effort is being made to also find reasonable revenue sources without punishing taxpayers.
Haridopolos, R-Merritt Island, refuses to consider collecting sales taxes on online purchases — despite the urging of the Florida Chamber of Commerce, which has made this a top goal, and rightfully so.
Based on Haridipolos' recent comments, we wonder whether he even understands the online sales tax issue. A sampling:
"I think we have made a pretty firm statement as far as sales taxes are concerned or tax increases, that there would not be an increase," he told reporters.
And this: "If there were any (revenue) adjustments, we'd have to see an equal reduction somewhere else."
Say what?
It's wrong to portray the collection of sales taxes on Internet purchases as a tax increase. This is all about enforcing the state's 6 percent sales tax, which online merchants and customers are avoiding but local bricks-and-mortar merchants have to pay or else risk fines or jail.
And to say, as Haridopolos did, that such a move would violate the Legislature's "no new tax" pledge is silly. This is the same head-in-the-sand approach that other lawmakers have employed when responsible leaders have suggested reviewing Florida's outdated sales tax exemptions, which unduly favor certain businesses.
Fortunately, Rep. Will Weatherford, a Wesley Chapel Republican slated to be the next House speaker, has a different view. Weatherford supports collecting sales taxes on online purchases as long as the seller has a "physical presence" in Florida. And that's a start.
Collecting sales taxes on online purchases, which Weatherford says also would require action by Congress, is not a new tax or a tax increase. It's a matter of fairness.
As Mark Wilson, the chamber president, explains: "If you go down to your local small businesses and you purchase something, they are required to pay the sales taxes. We believe the same thing should apply to online retailers, whether they are Amazon, whether they are in Florida or not."
Yet, the Legislature has refused to take steps to start collecting this much-needed revenue. In 2012 alone, according to the chamber, the state could take in as much as $1.48 billion . Instead, Haridopolos says the anticipated budget deficit would be handled by more cuts to services, which already have been cut to the bone in many areas.
Consider the plight of many clients of the Agency for Persons with Disabilities. The Home and Community-Based Services Waiver program, which helps many clients stay with their families and out of institutions, is woefully underfunded. People who need help the most are being hurt — including those who cannot speak or take care of themselves. Likewise, many service providers are struggling due to rate cuts.
For 2007-08, for example, the Legislature appropriated $958 million for the program. Funding for 2010-11 was reduced to $930 million, while last session lawmakers approved a bigger drop, to $810 million, forcing yet more cutbacks that can be devastating to families.
Collecting the sales taxes due on online sales could easily fill this gap and restore the program's funding to needed levels, as well as put a big dent in the budget deficit.
Florida's tax structure should be consistent and equitable. Internet sales tax collection would level the playing field for local business and generate funding for the developmentally disabled. It might even eventually allow additional tax cuts. But Tallahassee leaders, terrified of even uttering tax reform, would rather cling to the status quo than pursue a change that would surely help Florida's businesses and its most vulnerable citizens.