State: McKay calls Bush's tax stance 'mind-boggling'

TALLAHASSEE -- The political divide between Jeb Bush and the Florida Senate grew wider Wednesday as Republican senators blasted the governor for opposing Senate President John McKay's plan to revamp the state tax system.

An unhappy McKay tied Bush to the special interests fighting his tax plan. He called Bush's opposition "mind-boggling," and promised to soldier on with his crusade to shift about $4.2-billion in sales taxes from goods to services such as accounting and dry cleaning.

McKay's plan passed the Senate a week ago, 31-9. As the legislation heads to a House dubious of the need for new taxes, and as TV stations donate air time for spots attacking McKay's plan, Bush has chosen to weigh in with his opposition.

"It's beyond my ability to comprehend why anyone -- whether it's the governor, speaker or any of the special interest groups -- would want to deny the right of the voters to decide on an issue that's not been changed in 52 years," McKay said.

McKay says modernizing Florida's 1949 sales tax is long overdue. He wants to ask voters to drop the sales tax rate to 4.5 percent, which his economist says will save the average family $227 a year. In a separate 185-page bill, he proposes eliminating dozens of sales tax exemptions by 2004.

Business groups, chiefly broadcasters, accountants, farmers and real estate agents, say McKay's proposal will raise taxes for them while causing bureaucratic hardships.

Bush could veto the exemption bill but not the proposed constitutional amendment.

The governor is expected to explain his position this morning in a speech to the governing board of the Florida Chamber of Commerce, a business group loudly opposed to McKay's plan.

The governor's office, which usually has a crisp response on any issue, was oddly silent on the subject for the second day in a row. Reporters trooping into communications director Katie Baur's office got stock "no comment" responses.

But two Pinellas senators weren't so reticent.

Sen. Don Sullivan, R-Seminole, said he reread Bush's State of the State speech of two weeks ago. In it, the governor said: "I want to facilitate full, honest, and transparent dialogue" on McKay's tax plan.

"He says he wants to facilitate the discussion, and two weeks later, he says he doesn't want any discussion," Sullivan said. "It's a reversal of his position rather quickly."

"It's another example of his lack of respect and regard for the Florida Senate," said Sen. Jack Latvala, R-Palm Harbor.

McKay and his wife, Michelle, were enjoying dinner Tuesday night at the Silver Slipper, a steak restaurant locally famous for its curtained booths, when the Senate president got a testy phone call from Lt. Gov. Frank Brogan.

McKay said Brogan offered to "mediate" between the Senate and House before the tax controversy threatens every other major issue on the agenda.

It's not the governor's role to mediate disputes between the House and Senate, McKay said.

McKay's proposal has few takers in the House, and Republicans who already disliked McKay's plan will be further emboldened now that the governor opposes it.

Many business groups have called for another blue-ribbon commission to study Florida's tax system. Florida TaxWatch added its voice on Wednesday as it released a report on how Florida taxes compare with other states'.

The annual report, called "How Florida Compares," found the state's tax burden shifting from the state to local governments. Meanwhile, the state's per capita tax burden fell to 43rd in the nation, its lowest rank since 1985, TaxWatch found.

Taxes paid by businesses are the fifth-highest in the country, the report found.

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Lucy Morgan

From the Times state desk