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Florence staff outlines revenue impact of cutting insurance premium tax from 5% to 4%
Summary
City finance staff told council that cutting the insurance premium tax from 5% to 4% would reduce revenue by roughly $1 million a year (about $5 million over five years) but would not immediately create a general-fund imbalance; councilors pressed for resident-vs-business breakdowns and noted statutory timelines for ordinance changes.
Jason Lewis presented six years of actual insurance-premium-tax collections and the current fiscal-year budget, noting that the city has historically collected more than budgeted for this line item. He said the city budgeted $4,000,000 for FY26 but was on track to collect approximately $5,000,000.
Lewis and other staff projected that reducing the city's insurance premium tax rate from 5% to 4% (a 20% rate cut) would produce a revenue shortfall of roughly $1,000,000 per year, about $3,000,000 over three years…
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