Tax message heads to living rooms

As the idea of state tax reform polarizes the Capitol, foes of the plan start lobbying the public with TV ads.

By STEVE BOUSQUET, Times Tallahassee Deputy Bureau Chief
© St. Petersburg Times
published January 10, 2002

TALLAHASSEE -- Supporters and critics of a plan to overhaul Florida's tax system squared off Wednesday in a polarizing debate that will soon reach every Floridian who owns a TV.

Before a packed house of 100 lobbyists, some openly hostile to Senate President John McKay's plan to eliminate myriad sales tax exemptions, the chairman of the Senate Finance and Tax Committee said Florida's tax system no longer meets the needs of the fourth-largest state.

Chairman Ken Pruitt, R-Port St. Lucie, said the question is what kind of state Floridians want.

"Do you want mediocrity or quality?" Pruitt asked. "When you think of North Carolina, what do you think about? The Research Triangle. . . . When you think about the universities in Florida, what do you think about?"

After a dramatic pause, he said: "Football."

Pruitt's blunt assertion was meant to build a case for the most sweeping changes to the tax code in 50 years. They include cutting the sales tax from 6 percent to 4 percent while taxing many things now exempt, such as accounting and legal services.

Voters would have the final say in a constitutional referendum in November. But first, the measure must pass by three-fifths of the House and Senate.

While the debate raged in a Capitol hearing room, lobbyists for TV and radio station owners were distributing to every legislator a 12-minute video attacking McKay's plan.

The tape shows small-business owners criticizing the idea of a new tax system, splices in McKay's own comments to make him appear indecisive, and adds the views of former Rep. Winston "Bud" Gardner of Titusville. He championed the 1987 services tax that helped cost then-Gov. Bob Martinez a second term.

"We created an economic nightmare," says Gardner, now an executive of an engineering firm whose services could be taxed under McKay's plan. "I never before encountered so many angry people. Not just business people, but the average guy on the street."

The video's theme, "Ax the Tax," will be magnified in TV ads to be released today.

Pruitt's committee delayed a vote until later this month, and made some changes to McKay's plan intended to appease business interests.

But it did little good. Lobbyists for agriculture, accountants, small-business owners and pulp paper mills all took turns criticizing McKay's plan as bad for the state's economy.

Steve Birtman of the National Federation of Independent Business said closing a tax exemption on health insurance premiums would drive those costs higher for many small businesses.

Only one interest group endorsed the plan: the Florida Hospital Association. Lobbyist Tony Carvalho said the recent budget-cutting session and the prospect that 25,000 poor Floridians will lose their health coverage next July in a new round of cuts are powerful arguments in favor of tax reform.

The McKay proposal does not specify which services that are now tax-exempt would be taxed, but instead leaves that decision to the 2003 Legislature, which would set in motion an epic lobbying frenzy among special interests vying for tax-exempt status.

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