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Nelson to Scott: Why isn't shifting money out of a trust fund the same as a tax?

Gov. Rick Scott's plan to eliminate 124 trust funds and shift $7 bilion now earmarked for special purposes received a prickly reception at the House Government Operations Appropriations Subcommittee Tuesday.

Rep. Bryan Nelson, an Apopka Republican, asked Scott's budget advisor if shifting the money collected by hundreds of licensing boards paid by the industry professionals to pay for state regulation and oversight of their industry into the general revenue account was the same as raising a tax.

"With this proposal, license fees will be deposited into general revenue. Isn't this turning a license fee into a tax,'' Nelson asked asked at a meeting of the House Government Operations Appropriations Subcommittee.

"We don't believe so,'' said Brett Rayman, Scott's policy advisor on general government issues in his Office of Policy and Budget. "We sweep these trust funds anyway. It would give us a lot of flexibility to move these into the general fund.''

Nelson said many of the professional boards set their fees based on the projected cost of regulating and licensing their industry. "If these professional boards can lower their license fees, won't this have a negative impact on general revenue,'' he asked.

"Yes, it will have a negative impact on general revenue,'' Rayman responded. "But we should only charge them fees that we need to do the regulation. That's one reason why we sweep these funds because in many cases we're overcharging them.''

Nelson said later that state government often serves as the collection agency for these groups that want the regulation and this eliminate any incentive for them to collect fees to cover those costs.

“A lot of groups have come to us and asked to be licensed – to clean up and professionalize their industry,’’ he said. If the money they raise to pay for that oversight is now steered in to the general budget, many of those boards may choose to reduce or eliminate their fees and the state won’t realize that savings, he said.

Nelson suggested that Scott, a newcomer to government, may not understand this. “If he hasn’t learned it yet, he will,’’ he said.

 

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