Gov. Bush warns of dour fiscal prospects

In an apparent appeal for help with vetoes, Bush asks legislative leaders to help trim spending.

By TIM NICKENS and ALISA ULFERTS

© St. Petersburg Times,
published June 12, 2001

TALLAHASSEE -- With the deadline looming for budget vetoes, Gov. Jeb Bush warned legislative leaders Monday that Florida's financial picture isn't as rosy as it was last month when they earmarked millions of dollars for pet projects.

Bush's letter to House Speaker Tom Feeney and Senate President John McKay outlined his concerns about falling tax revenues, the impact of changes to the estate tax approved by Congress, and spending practices by state lawmakers.

The tone of the governor's letter was non-threatening, and it asked Feeney and McKay for suggestions to address the budget concerns. But McKay said the message was clear.

"Sounds like he wants to talk about budget vetoes to me," the Bradenton Republican said.

A spokeswoman for Feeney said Monday evening that the speaker had not yet seen the letter and would not be prepared to comment until today.

Bush has until midnight Saturday to exercise his line-item veto power over the $48.3-billion state budget approved by the Legislature. Each of the past two years, the Republican has cut a record $313-million in line items from the annual budgets approved by state lawmakers. That left members of both parties upset.

Katie Baur, the governor's communications director, said there is no hidden agenda in Bush's letter.

"We were simply trying to lay out the fiscal landscape for the House and Senate leadership," she said. "It's just like a family that incurs an unexpected debt or receives a large bill. They have to adjust their spending."

In his letter, Bush noted that the state's general revenue collections for May were $92-million less than projected.

The state also expects to lose $210-million in 2002-2003 because of a change approved by Congress that shifts responsibility for collecting the federal estate tax from the U.S. government to the states, Bush said.

"While I support the eventual repeal of the estate tax," he wrote, "shifting the burden merely allows Washington to spend more, while requiring us to spend less."

But Bush's most pointed argument focused on arcane budgeting tactics used by state lawmakers. The governor said that legislators earmarked one-time revenues of more than $600-million on programs and projects that would cost the state a similar amount every year.

Legislators have used such tactics in the past. But critics argue that those spending practices create larger budget holes to fill in future years because the projects exist but the money that paid for them is gone.

McKay said he did not share Bush's concern about how the Legislature raised and spent the $600-million.

"It's not unusual," he said of the maneuver. "It may be unfamiliar to him."

Bush isn't showing any hesitancy to veto projects sought by powerful lawmakers. Over the weekend, he vetoed $1.5-million from two projects that Senate Appropriations Chairman Jim Horne slipped into an economic development package.

"Neither of these appropriations went through a formal review process, nor do they in my view provide a statewide benefit to the citizens of Florida," Bush wrote in his veto letter.

One amendment sought $1-million to promote the information technology industry. Bush said the provision was so narrowly crafted that it would have benefited just one company, South Florida software giant Citrix Systems.

Horne, the Orange Park Republican whom Bush appointed last week as the new secretary of education, and Citrix officials could not be reached for comment Monday.

Bush also vetoed a sales tax rebate of up to $500,000 for certain schools that train pilots. Horne also drafted that amendment, but it was unclear whether it was intended to benefit a specific school.

On Monday, House Minority Leader Lois Frankel suggested that Bush could save the state money by vetoing a bill that would cut the intangibles tax on stocks, bonds and other investments and provide corporate tax credits for money earmarked for private school tuition. "We're in a hole," said the West Palm Beach Democrat, who also urged Bush to veto lawmakers' pet projects. "I think he should do both."

Not likely.

Bush drew cheers at a Republican fundraiser in Orlando on Saturday night as he pledged to sign into law the bill to cut the "insidious" intangibles tax.

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