TALLAHASSEE, Fla. - State-chartered credit unions in the Sunshine State have a tip Florida Credit Union League officials received from a staffer in the Florida Department of Banking & Finance, and some fast action by the FCUL's team of three lobbyists to thank for the League's success in blocking what...
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TALLAHASSEE, Fla. – State-chartered credit unions in the Sunshine State have a tip Florida Credit Union League officials received from a staffer in the Florida Department of Banking & Finance, and some fast action by the FCUL’s team of three lobbyists to thank for the League’s success in blocking what could have collectively amounted to an $8 million tax on SCCUs. The issue came up during a special session of the Florida legislature held the week of Oct. 29 to address ways to address the $1.3 billion budget shortfall the state government is facing as a result of a weakening economy and Sept.11′s terrorist attacks. Florida law stipulates that budget deficits are not permissible, so that has left legislators with choosing between reducing the amount of money being spent, or increasing the amount of money coming in. Several years ago the Republican leadership of the state legislature determined as part of a four-year plan, to reduce the state’s intangible tax on certain assets. That plan has progressed, and in the 2001 regular session of the state legislature, elected officials passed a budget plan that among other things, reduced the intangible tax by 25%. But faced with the economy’s unexpected downturn and international events, and the need to make up the unexpected shortfall in the state budget, a staff member of House Majority Leader Jerry Maygarden (R-Pensacola) raised questions concerning the possibility of eliminating the tax-exempt status of credit unions in the state. FCUL Executive Vice President Oletta Shutes said the legislature first had in mind to apply the repeal of the tax exemption to all CUs in the state – both federal and state – but when legislators were informed that federal CUs are protected by a federal exemption, the proposal was revised to only apply to state credit unions. Once the FCUL became aware of the discussions to eliminate SCCUs’ tax exemption, League lobbyists Mark Landreth, Jim Smith and Bernie Parrish immediately “descended” on the office of House Majority Leager Maygarden to voice their concerns and objections. After hearing from the FCUL, Maygarden informed the lobbyists that the proposal would not be considered during the special session. There are 18 credit unions in Maygarden’s district. They include credit unions such as Pen Air FCU, Pensacola ($480 million in assets) and Monsanto Employees CU ($181 million in assets). Had it been approved, the elimination of the exemption to the state’s intangible tax would have cost state credit unions $8 million, based on a total portfolio of $1.6 million. At press time, the Florida legislature had worked out an agreement on the budget problem to delay the repeal of the intangible tax until July 2003. That assures legislators the money will be there for the state. Maygarden, however, did not rule out legislative consideration in future special sessions or during the regular session of the state legislature, which begins in January 2002. FCUL spokesman Mark Ivester emphasized that, “Governor Bush was in no way involved with this proposal.” Landreth said he didn’t want to venture to guess what might have happened if the Florida League hadn’t become aware of the discussions the legislature was having on the repeal of SCCUs’ tax exemption. At the very least, it would have affected the dual chartering system in the state. “It just goes to show the benefit of putting your sensors to the ground,” he said. “The Florida tax code is replete with exemption after exemption, so that’s why we can’t rule anything out,” said Landreth. While League lobbyists’ quick work stopped any consideration for now of repealing the tax exemption of state chartered credit unions that hold mortgages, “Just the fact that legislators raised the question of taxing state chartered credit unions is cause for concern,” said Ivester. The League has put together a package of talking points on the issue and mailed the packets out to affiliated credit unions. In addition, said Ivester, “Anytime we communicate with legislators from now until the session starts in January, we will talk with them about this issue.” -
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