Florida TaxWatch calls for $1 billion savings
By Bill Cotterell | The Current
State government should move toward collecting the sales tax on Internet purchases, give state employees a bigger stake in their own health care and drop the "DROP" pension plan that lets workers stay on the job while collecting pensions.Those were among the items listed Thursday as a conservative policy organization presented its billion-dollar legislative wish list.
"Florida is one of the more efficient and lower tax-burden states in the country," said Dominic Calabro, president of Florida TaxWatch. "We are continuously looking for ways to do it better."
TaxWatch annually assembles a panel of business and community leaders to make recommendations, prior to legislative sessions, on ways the state can cut costs and increase revenue collections -- without new taxes. This year's report was divided into five general areas: health care, criminal justice, education, government operation and revenue.
John Alexander, who chaired the 21-member task force, said its 25 recommendations would save the state more than $1 billion if all are implemented. He emphasized that collection of the sales tax on "remote" transactions -- such as purchases at Amazon.com or other Internet sites -- is not a new tax.
"This is a legally owed tax that is not being collected across the board," he said. "Online vendors have an unfair advantage over the citizens of this state who have invested their money in brick-and-mortar stores."
TaxWatch estimated that improving collections and streamlining sales-tax applicability would net about $58.5 million.
The big-ticket item on the TaxWatch list of recommendations was a $380.3 million idea to change the state health-insurance model from a "defined benefit" plan to a "defined contribution" method of premium support, in which insurance providers could compete with premiums, deductibles, co-payments, coverage limits and other benefits. Employees could choose what suits their needs, potentially lowering costs through market-based competition, TaxWatch said.
It also said the state should give financial incentives for employees improving their own health, to reduce insurance costs.
The DROP plan -- deferred retirement option program -- allows qualified employees to retire and have their pensions banked for them while they continue to work, usually for five years. TaxWatch said there were 36,890 deferred "retirees" working as of June of 2011, with an accrued liability of $2 billion for taxpayers. Going forward, TaxWatch estimated eliminating DROP would save $71.4 million a year for state and local governments.
On another pension matter, TaxWatch said the Legislature should limit special-risk retirement benefits to actual frontline police and prison officers, firefighters and emergency service workers -- eliminating many support and office employees in law-enforcement agencies who do not have dangerous jobs.
State Sen. Alan Hays, R-Umatilla, chairman of the Senate Appropriations Subcommittee on General Government, praised the task force recommendations for speeding up disposition of state lands and buildings that are no longer needed -- which TaxWatch said could save $39 million. Hays also liked a recommendation to increase electronic time and attendance records for employees checking in and out at work.
"The state owns thousands of properties utilized for many purposes, including farms, forests, parks, DOT easements, vacant land, schools, universities, warehouses -- just a multitude of things," Hays said. "If the land is not serving a useful purpose and probably doesn't have a useful purpose forecast in the near future, we need to put that land back on the tax rolls."