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    Senate relaxing stand on tax cuts

    The House presses hard for cuts as political realities set in before final budget talks.

    By DIANE RADO and ALISA ULFERTS

    © St. Petersburg Times, published April 4, 2001


    TALLAHASSEE -- The Florida Senate's tough stance against Gov. Jeb Bush's proposed tax cuts began to soften Tuesday, with key Republican senators acknowledging that a compromise may be inevitable.

    The House wants $355-million in tax cuts, including reducing the state's intangibles tax on stocks, bonds and other investments for the third year in a row, and repeating a popular sales tax "holiday" for back-to-school shoppers.

    Bush proposed similar cuts.

    Three weeks ago, Senate President John McKay said that state finances were too tight to give out tax breaks next budget year. Lawmakers have been grappling with a nearly $1-billion shortfall in Medicaid, among other challenges.

    Now, political realities are setting in as the House and Senate head into tough negotiations on a final state budget.

    From a policy standpoint, "The Senate is very confident with the position it has taken (on tax cuts)," said Senate Rules Chairman Tom Lee, R-Brandon. "But the political reality is that you can't take this issue off the table for discussion."

    Said Senate Majority Leader Jim King: "In the political arena, you never say never."

    The House and Senate unanimously approved their own versions of a state budget on Tuesday. Now the two sides have to iron out their differences.

    This is a give-and-take process, and each side has its own priorities. The Senate has spent more on public education, health care and social services programs.

    The state House has its tax cuts, and it isn't likely to give up on them entirely, said King, who has spoken to House Speaker Tom Feeney and House Majority Leader Mike Fasano about the tax cuts.

    "It's obvious to me it's an important issue to them," King said. "In this process, it does take two to tango."

    The House started playing hardball Tuesday, refusing to name the lawmakers who will serve as negotiators on the final budget. House budget Chairman Carlos Lacasa, R-Miami, said the House won't make the appointments until it gets more information from the Senate on how much money will be available to craft the state budget. That figure is tied directly to how much money will be set aside to cover any tax breaks.

    "Obviously, we're not going to go along with $355-million (in tax cuts)," said King.

    Senate Banking Chairman Jack Latvala, R-Palm Harbor, said Tuesday that he could support a "trimmed-down" tax cut package. One scenario would be a small cut in the intangibles tax and a brief tax-free shopping holiday. Bush proposed a nine-day period during which shoppers could forgo paying sales tax on clothing items of less than $100.

    But Sen. Don Sullivan, R-Largo, who chairs the education budget committee, said he believes a half-dozen or so Republicans would not favor any tax cut.

    Any tax cut would come over the objections of Democrats, who have said the budget proposals for 2001-2002 cut programs for poor, elderly and disabled people and don't spend enough on schools.

    "This budget is like a doughnut with a big hole in it," said state Rep. Eleanor Sobel, D-Hollywood. House Democrats also complained that local school districts might have to raise taxes to pay their share of school funding. But Republicans insisted that taxes would go up only if property assessments rise.

    In the Senate, Democratic leader Tom Rossin urged his colleagues to hold firm: "We will send a message to the people of Florida. The Florida Senate will not allow the needs of Florida's most vulnerable citizens to be sacrificed for more tax cuts."

    But Rossin got no assurances from Senate Appropriations Chairman Jim Horne. "We believe that the Senate budget is the best budget, and we're going to work hard to hold our budget," Horne said. "But we also need to understand that things do happen when you go through the conference (negotiating) process and there is some give and take as you go through the process."

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