Taxpayer's Tab: Line-By-Line Florida Special Election Analysis

Vol. 5 Issue 8, February 27, 2014

Check out the Least Expensive Bill of the Week section to learn about what the "belly-button" tax is and why Congressman Tiberi wants to repeal it.

Line-By-Line Florida Special Election Analysis

On March 11th, residents of Florida's 13th Congressional District will choose a successor to finish out the late Congressman Bill Young's (R-FL) term in office. The current frontrunners for the seat include former general counsel to Bill Young David Jolly (R), activist and commercial diver Lucas Overby (L), and former Chief Financial Officer of Florida Alex Sink (D). How will the platforms proposed by each candidate affect the federal budget?

To help bring fiscal transparency to Floridians, National Taxpayers Union Foundation (NTUF) went line-by-line through debate transcripts and campaign websites to identify each candidate's direct quotes of proposals that could impact spending. Those proposals were matched with current budgetary figures and legislation proposed in Congress. The study used rules similar to NTUF's BillTally project in which changes in spending were recorded and annualized to show taxpayers exactly how each candidate would increase or decrease spending. For some proposals, insufficient details are available to determine a cost estimate.

Net Spending Agendas:

  • David Jolly: -$60.04 billion (savings)
  • Lucas Overby: $191 million
  • Alex Sink: $20.391 billion

The results show more unknowns than known spending changes, but there is still time for each of these candidates to provide 13th District residents with the information they need. Check out the summary of each candidate on the Government Bytes blog and look at the in-depth report on all three candidates.

Most Expensive Bill of the Week

The Bill: S. 1086, the Child Care and Development Block Grant (CCDBG) Act

Annualized Cost: $320 million ($1.6 billion over five years)

The Child Care and Development Block Grant (CCDBG) is a federal program administered by the Department of Health and Human Services to provide funding to the states to subsidize child care services to low and middle-income households. In addition to the Temporary Assistance to Needy Families and the Child Care Entitlement to States, the CCDBG is one of several federal child care assistance programs for parents seeking employment or who are participating in workforce training. Approximately 1.7 million children receive some form of subsidy each month at a yearly federal cost of $5.4 billion (of which CCDBG is allocated $2.4 billion) in FY 2014.

The CCDBG's last multi-year reauthorization was from 1996 through 2002, since then, the program has been funded each year by annual budget agreements. Currently, spending is authorized through the end of FY 2014 and Senator Barbara Mikulski (D-MD) has proposed to fund CCDBG through FY 2020 and to make changes to the program.

S. 1086 would expand subsidies and benefits to include infant and toddler care. As a federal-state matching initiative, states would be required to increase spending for more training, professional development, and advancement of child care workers. Child care employers would be mandated to conduct background checks on all workers. Employees must also be trained in child-related health care issues, such as administering public safety measures for infectious diseases or food allergies, as well as as for medical response, like first aid and CPR.

Using budgetary figures from a Congressional Budget Office (CBO) report, NTUF determined that S. 1086 would increase federal spending by a total $1.6 billion between FY 2015 and 2019. This amount would be in addition to the $2.4 billion baseline for the current Fiscal Year.

To learn more or discuss this bill visit


Least Expensive Bill of the Week

The Bill: H.R. 3489, a bill to amend section 1341 of the Patient Protection and Affordable Care Act to repeal the funding mechanism for the transitional reinsurance program in the individual market, and for other purposes.

Annualized Savings: $1.7 billion ($5 billion over three years)

Whether it's the technical challenges with state and federal exchange websites, the multiple delays of certain of its provisions, or the controversy over its deleterious effects on employment and job growth, the implementation of the Affordable Care Act (ACA) has been a difficult burden for policymakers and ordinary citizens alike. As then-Speaker of the House Nancy Pelosi ominously warned that Congress had to pass the bill so we could find out what is in it, taxpayers are still uncovering programs and taxes hidden in the layers of complexity that is the ACA. Congressman Pat Tiberi (R-OH) has brought attention to one such program in a bill he recently introduced in Congress.

Perhaps one of the lesser-known provisions of the ACA is the temporary transitional reinsurance program. Through this program, the Department of Health and Human Services assessed a fee, starting on January 1 of this year, charged to certain businesses and organizations that provide group health insurance plans. Under current law, it will be levied over the next three years in the form of a per-plan-participant "contribution" that initially starts at $63 in 2014, and will gradually decrease in 2015 and 2016. The federal government will use the funds (set at $25 billion in the law) to partially reimburse insurers who cover high-risk (and therefore, high-cost) individuals who receive insurance through the ACA's exchange markets.

The intention is that premiums will be more stable for all participants if the cost of insuring high-risk individuals is partially offset, since providers would then be less likely to pass that cost on to lower-risk, lower-cost enrollees. The government is required to collect $12 billion in 2014, $8 billion in 2015, and $5 billion in 2016 in order to finance those payments.

A similar ACA cost-mitigation concept known as "risk corridors" made headlines, as well. That provision is intended to reduce insurance providers' losses if they have to cover a high number of sicker, more costly customers under ACA, which recent enrollment trends seem to suggest will happen. If insurers' costs exceed premiums by three to five percent, the Department of Health and Human Services will reimburse them for 50 percent of those losses; if the costs are higher than eight percent, the government (i.e., taxpayers) will then pay for 80 percent of the losses.

Rep. Tiberi's legislation, H.R. 3489, would repeal the fee, which he refers to as the "belly-button tax," and replace it with an authorization of appropriations for each of fiscal years 2014, 2015, and 2016. Those amounts would total $5 billion less than the $25 billion that current law stipulates the government must collect for the transitional reinsurance program. On average, that reduction amounts to $1.67 billion per year. In a press release, the Congressman said "[the] bill will protect workers from having their healthcare costs increased and prevent penalizing employers from having to pay millions of dollars in burdensome fees."

To learn more or discuss this bill visit


The Wildcard

The Bill: H.R. 3967, a bill to amend the Internal Revenue Code of 1986 to extend the increased limitation on the cover over of the tax on distilled spirits to Puerto Rico and the Virgin Islands

Annualized Cost: "No Cost" -- Revenue

The warm climate and abundance of sugar cane make the U.S. Virgin Islands (VI) and Puerto Rico (PR) home to many of the finest rum distilleries in the world. If you want to have some of their product shipped to one of the 50 states, however, the federal government collects an excise tax on that purchase, a policy originally intended to make sure that territories wouldn't have a tax advantage over U.S. producers that make similar goods. The current rate is $13.50 per proof gallon of rum (or other distilled spirits).

In what is known as a tax "cover over," however, most of that revenue is returned to the treasuries of the Virgin Islands and Puerto Rico. While there aren't any restrictions on how those governments can use the money, they usually spent it on promotion of their respective rum industries and for general economic development initiatives. According to the Congressional Research Service (CRS), recent "cover over" revenues in VI and PR have been in the area of $400-500 million per year, and over $6.5 billion total since 1990.

From June 30, 1999 to December 31, 2013, the "cover over" rate was $13.25 per gallon of spirits, nearly all of the $13.50 tax; but that rate expired at the end of last year and as of January 1, 2014, was automatically reduced to $10.50 per gallon. Resident Commissioner Pedro Pierluisi (D-PR), who represents Puerto Rico at large in the U.S. Congress, introduced H.R. 3967 to extend the higher reimbursement rate and retroactively apply it for all spirits brought into the United States since December 31, 2013. "Now more than ever, as we face big challenges amid a serious fiscal crisis, we must defend all federal initiatives that promote investment and create jobs on the island," he said recently.

Because the bill amends the Internal Revenue Code and apply only to tax provisions, NTUF scored Delegate Pierluisi's legislation as a "no cost" measure under the BillTally methodology.

To learn more or discuss this bill visit


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Issue 3 - Jan 23
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About NTUF

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