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    Governor says he will reject McKay sales tax plan

    The Senate president expresses disappointment, says he expected more dialogue from Bush.

    By STEVE BOUSQUET, Times Tallahassee Deputy Bureau Chief
    © St. Petersburg Times
    published February 6, 2002

    TALLAHASSEE -- Two weeks after calling for a full discussion of Florida tax policy, Gov. Jeb Bush sent word late Tuesday that he will oppose Senate President John McKay's proposal to cut the sales tax and tax some services.

    Bush's legislative lobbyist, Lt. Gov. Frank Brogan, broke the bad news to McKay on Tuesday night.

    McKay made no attempt to hide his disappointment, one more sign of friction in an unpredictable session dominated by reapportionment and a tight budget.

    "I'm disappointed that the governor's current actions are inconsistent with his earlier statement about wanting a transparent dialogue on this issue," he said in a statement that was relayed through spokeswoman Karen Chandler.

    Bush's communications director, Katie Baur, declined to comment.

    Bit by bit, Bush has distanced himself from his fellow Republican's bold initiative to tax dozens of services, while cutting the sales tax rate from 6 percent to 4.5 percent.

    While Bush's opposition was not entirely unexpected, the timing was a surprise.

    McKay crafted his proposal as a constitutional amendment, subject to voter approval, to insulate the re-election-minded governor from having to take a position. A governor has no authority to veto such amendments.

    But some of Bush's political advisers have been nervous from the outset that the governor might have to share the ballot with such an explosive tax question.

    One adviser, Cory Tilley, is spokesman for the antitax Coalition to Protect Florida's Economy. Another adviser, former Bush chief of staff Sally Bradshaw, has sat in on at least one of the coalition's strategy sessions.

    Bush is sending letters to McKay and House Speaker Tom Feeney, explaining his reasons for opposing McKay's plan, which passed the Senate last Thursday with the support of 18 of the 25 Republicans in the chamber. Several prominent Republicans, hoping to bolster the case for a new tax system, described a state that is spiraling downward in education and human services.

    Their bleak portrait of a failing Florida stood in sharp contrast to the governor's recent remarks to the Greater Tampa Chamber of Commerce, in which he described a state "in its ascendancy, not its decline."

    McKay has the support of Florida's cities, counties, school boards, teachers' union, AARP and the Florida Hospital Association.

    Opponents are led by powerful business forces, such as the Florida Association of Broadcasters, the Florida Institute of CPAs, Associated Industries of Florida, Realtors and agricultural groups.

    Lobbyists working to defeat McKay's plan said Tuesday they expected the governor to use an appearance before the Florida Chamber of Commerce's board of governors Thursday as a forum to give a full explanation for his opposition.

    In his State of the State speech on Jan. 22, Bush called for a "full, honest and transparent dialogue" on tax reform. At the same time, he struck a skeptical tone, raising questions about tax fairness, the cost of compliance, and whether tourists would have to pay less.

    McKay tried to blunt the tourism argument by tweaking his proposal to keep the sales tax at 6 percent for rental cars, hotels and short-term rentals.

    Bush's opposition is one more piece of bad news for McKay. It comes at a time when the Senate leader is still hunting for anyone in the House willing to carry the torch for tax reform in a year of reapportionment and re-election campaigns.

    Rep. Nancy Detert, R-Venice, congratulated McKay for starting a debate over Florida's tax system, but said she could not support McKay's plan in its current form.

    "He's got a tough row to hoe on this side of the building," Detert said.

    Earlier Tuesday, a House Republican task force studying McKay's plan invited two veterans of Florida's last services tax fight to share their experiences.

    It's no coincidence that both men, lobbyists J.M. "Mac" Stipanovich and Randy Miller, are leading the charge to defeat McKay's tax plan.

    Stipanovich, who represents accountants, helped build a business coalition that is filling airwaves with ads attacking McKay's plan. Miller lobbies for Associated Industries, the business lobby. For an hour Tuesday, before an adoring panel of House Republicans, both men talked not as hired guns, but as historians.

    Stipanovich, who was former Gov. Bob Martinez's chief of staff, recalled how the 1987 tax on services caused his boss' popularity to sink so low that he was once booed by patrons in a restaurant. And when a Senate committee seemed poised to reject the tax, he said, the Senate president simply replaced two opponents with two supporters the night before a key vote.

    "That probably was not good government," he said. "But that's what it took to pass it."

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