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Florida Legislature 2005 (click for ongoing coverage)

THE LATEST Man gets $2M for 22 years he lost Mystery: Who left money faucet on? Many hurricane relief measures get blown away Dramatic proposal, cautious response Legislature doesn't act on minimum wage deal For open-government cause: 'a mixed bag'

Growth needs are priority

State leaders agree on a spending plan that would provide $1.5-billion next year to make managing growth a priority. Tax cuts will continue.

By STEVE BOUSQUET
Published April 22, 2005

TALLAHASSEE - Florida residents fed up with gridlock and crowded schools were the biggest winners Thursday in a legislative spending plan that puts a priority on managing the state's rapid growth.

The spending deal assures a construction boom in roads, schools and water projects for years to come.

It also produces another round of tax cuts, including a temporary sales tax holiday on back-to-school items, a sales tax holiday on hurricane supplies and another cut in the intangibles tax on stock portfolios greater than $250,000.

By agreeing to dole out $1.5-billion next year and to seek a steady source of funding in the future, Republican legislative leaders are charting a path for managing Florida's population boom. They have made managing Florida's growth a growth industry.

"All this is being done with an eye on the future," said Senate President Tom Lee, the architect of the growth management strategy and the first Tampa Bay lawmaker to be leader of the Senate in two decades.

Lee, a home builder from Brandon, reached the spending agreement in a phone call Wednesday with House Speaker Allan Bense, R-Panama City. Both men said the deal capped a series of friendly discussions.

"We have a lot of money and we're going to put a lot of it back into the infrastructure of Florida," Bense said. "It's like a business."

Florida grows by about 300,000 people every year, the equivalent of a city the size of Tampa. Guaranteeing a steady flow of money to pay the costs of that growth is Lee's top priority.

The agreement calls for spending $1.5-billion next year on growth management and $750-million in subsequent years. The source of the money has not been set, but Lee wants to use documentary stamp taxes paid on real estate transactions, a rapidly-increasing source of revenue that is tied to growth.

If the state issued bonds subject to voter approval, it could borrow $8-billion to be repaid over 10 years.

Lee had wanted to invest $35-billion over a decade for growth, but Bense was reluctant at first to spend more than $500-million a year. An unexpected tax windfall from a surging economy allowed the House to triple that amount to $1.5-billion.

"That's real money," said Janet Bowman, a lobbyist for 1000 Friends of Florida, an environmental group.

The other main points in the spending deal include:

A 6 percent per student increase in public school spending.

A $2,500 per-student allocation for the new voluntary prekindergarten program.

An increase of $127-million in human services spending to meet the Senate's higher demand for spending in that area.

An increase of $130-million in water projects, which the House wanted.

Pay raises for state employees of 3.6 percent.

Borrowing money for two popular environmental programs, Everglades restoration and Florida Forever, which the Senate wanted. The House favored using cash.

The agreement reached between Lee and Bense clears the way for budget negotiations between the Senate and House on a $63.5-billion budget, the largest in state history.

While the two leaders decided how much new money to spend in different budget categories, such as education and criminal justice, they did not decide how that money will be spent. A House-Senate conference committee will make those decisions.

Nor have Lee and Bense agreed how to divide the $1.5-billion for growth.

"We have the appropriation available," Lee said. "Now we have to get the policy right."

Dozens of other issues must still be resolved before the budget is complete, from the size of a college tuition increase to the number of new trial judges to the growth rate in the Medicaid insurance program.

For example, universities and community colleges are clamoring for more money, saying that what legislators are offering does not cover the expected influx in new students.

"I think we're still too short for universities," said Sen. Ron Klein, D-Delray Beach.

Lee and Bense will broker any issues that cannot be resolved by legislative committees over the next 10 days.

Bense and Lee also agreed on a 12-day sales tax holiday for hurricane-related items such as flashlights, generators and batteries. The proposal is sponsored by a Democrat, Rep. Ron Greenstein of Coconut Creek.

Some House Republicans grumbled that the tax cut package, worth about $225-million, was too modest in a year when tax revenue is setting a record. The House wanted to wipe out all of the remaining tax on investment portfolios this year and eliminate a by-the-drink tax on alcohol, but Lee refused.

Rep. Fred Brummer, R-Apopka, an outspoken fiscal conservative, said he felt "crappy" that the Senate refused to consider the drink-tax repeal he sponsored. The repeal breezed through the House Wednesday.

Bense said he considered the tax cuts a triumph because the Senate had balked at all of them before finding a way to pay for growth management.

There is still no deal on a proposal, backed by the Senate and opposed by the House, to help pay for growth by allowing counties to raise local sales and gas taxes without voter approval in a referendum.

Bense reiterated that the idea faced an uphill fight in the House, and some Senate Democrats oppose any intangibles tax cut, which benefits wealthier investors, while slapping new tax increases on homeowners.

"I don't think we should be cutting taxes on the richest of the rich and then putting taxes on the masses across the state," said Sen. Les Miller, D-Tampa. "I think that's going to be a major problem with the budget."

"In this process, no one should and no one will ever get everything they want," Lee said. "It's a team sport."

The budget is the only bill lawmakers are required to pass under the Constitution, which also requires them to wait three days between final approval of the budget and a final vote. The annual session is scheduled to end May 6.

Times staff writer Joni James contributed to this report, and information from the Associated Press was used.

$63.5-billion: Total spending

$1.5-billion: Amount for growth management.

$225-million: Total tax cuts.

$127-million: Increase in human services spending.

3.6: Percent pay increase for state workers.

[Last modified April 24, 2005, 11:02:25]