Florida TaxWatch: “SB 620 has real risk to negatively impact taxpayers”

by | Jan 20, 2022

 

 

Florida TaxWatch President Dominic M. Calabro spoke in front of the Senate Appropriations Committee on Thursday morning to express the concern that he and the bipartisan, nonprofit tax watchdog holds regarding Senate Bill 620 (SB 620). The bill proposal seeks to authorize businesses the right to claim business damages from a county or municipality if the county or municipality enacts or amends certain ordinances or charter provisions, allowing businesses to recover costs and fees in a specified manner if requirements are met.

“Florida is a state built for business success, with low taxes and leaders that focus on balancing economic growth with quality of life and community vibrancy,” said Calabro. “It does suffer, though, from a very litigious climate – earning us the distinction of “judicial hellhole”– and the proposal being considered here has real risks for making this worse and negatively impacting taxpayers.”

Calabro argued that Floridian taxpayers would ultimately have to shoulder the primary expenses, claiming that increased expenditures from the exposure will translate into costs for average state residents, dealt with in either of two ways: increased taxes, and fees to cover projected legal costs or a reduction in services provided to communities.

“The provisions provide an incentive to allege damages and businesses losses which makes local governments more vulnerable to financially motivated and malicious lawsuits filed with the intent of securing a cash settlement. History is instructive here. A January 2016 Florida TaxWatch report which focused on predatory public records requests examined the financially motivated and malicious “sue and settle” practices similar to those possible here,” said Calabro. “In addition to the direct costs, our analysis projects secondary fiscal effects which can have negative consequences for communities and taxpayers. From a risk management perspective, any increase in financial risk or actual losses have the potential to increase the cost of insurance, lower bond ratings, and increase the cost of borrowing for local governments.”

SB 620 was originally filed on Oct. 25, 2021 by Senator Travis Hutson. Since its filing the bill was approved by a judiciary committee, passing by a margin of 7 ‘yeas’ and 4 ‘nays.’

“We must ensure that Florida remains the best place to launch and run a business but individual and business taxpayers need to know that the systems designed to secure that favorable business climate does not give rise to predatory practices that will bleed their pocketbooks and damage their community capacity to address future needs,” Calabro concluded.

The bill is anticipated to be heard on the Senate floor in the coming weeks, with an anticipation that it will likely pass through legislation.

 

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