State: Tax reform critics see signs of vengeance and 'politics'

TALLAHASSEE -- The night before the 2002 Legislature convened, Senate President John McKay bumped into one of the state's most influential lobbyists outside the Governor's Club, an exclusive downtown establishment.

Jon Shebel, president of Associated Industries, said McKay threatened his company's future.

Shebel, who had just finished wining and dining 4,000 lawmakers and families, said McKay told him he was going to revive a proposal that would block Shebel from serving as an officer of another company he runs.

Shebel said McKay is seeking revenge for Associated Industries' strong opposition to the Senate president's controversial plan to overhaul the state tax system.

"I don't have any desire to talk to John McKay," Shebel said Wednesday. "He's told everyone exactly how he feels and he has used that amendment to try and destroy a $175-million company."

Shebel isn't the only one accusing McKay of using his power for payback.

Accountants say that's the reason a Senate committee decided Wednesday to discuss regulating their industry. They, too, are opposed to the tax plan.

"It's no longer about tax reform," said Lloyd "Buddy" Turman, president of the Florida Institute of CPAs. "It's unfortunate that it's politics. But it is what it is."

McKay's proposal lets voters decide next fall whether to extend the sales tax to dozens of services that are now tax free, while cutting the general sales tax rate from 6 to 4.5 percent.

McKay, who said his plan is needed to insulate Florida from recessions, insists that he is the one being treated unfairly by TV stations and wants them to yank "misleading" ads about the tax proposal. He has hired a Tallahassee lawyer, who wrote station managers a stern letter requesting free time to respond.

"I'm lobbying people, not threatening them," he said.

Shebel said McKay told him he plans to revive an amendment that would ban anyone from serving as a corporate officer of a company if that person had ever been a director of a company that went under.

Shebel once ran an employee health plan that went under. Afterward, Shebel said, he worked for $1 a year for two years to make sure that all of those insured by it could collect. Shebel's new company, Associated Industries Insurance, is the third largest provider of workers' compensation insurance in Florida.

McKay said he mentioned it to Shebel not as a threat but to indicate that he intends to pursue it again.

"I congratulated him for being smart enough to find it and kill it last year and told him he's seeing it again," he said.

A new poll commissioned by Associated Industries found that Floridians oppose the effort to reform the state sales tax, even when told it might save them money, because they don't trust legislators.

In a poll taken over two days last weekend, 69 percent of the 600 likely voters surveyed said they were strongly opposed to the tax plan.

Sixty-eight percent of those surveyed said their families had "hit the limit" on taxes and would oppose any type of increase. Seventy-one percent said state government spends too much money. A similar question asked of voters eight years ago found only 34 percent saying they had hit their tax limit.

On Wednesday, one of McKay's biggest supporters, Sen. Jack Latvala, used the questionable accounting practices in the Enron debacle as a reason to look into how accountants are regulated in Florida.

"We need to make sure these things don't happen in Florida," Latvala said. "I have significant concerns."

Latvala, R-Palm Harbor, made the suggestion at a Senate Regulated Industries committee meeting and received support from other senators, also supporters of tax reform.

They "are using this to punish us for the services tax," J.M. "Mac" Stipanovich, a lobbyist for accountants. "This is a tough fight and I expect them to use what they can."

Not so, Latvala says.

"That has nothing whatsoever to do with tax reform," he said. "I was concerned over my portfolio and the portfolio of everyone who lives in my district."

A Senate committee's approval of its first redistricting plan last week didn't help another a skeptic of the tax plan, House Speaker Tom Feeney, who wants a new congressional seat drawn for himself in the Orlando area.

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Lucy Morgan

From the Times state desk