Bush: Budget cuts, tax increases not needed

The governor counters calls from Democrats, who say a special legislative session is needed to revise the budget.

By LUCY MORGAN and ALISA ULFERTS

© St. Petersburg Times,
published August 29, 2001

TALLAHASSEE -- Florida has adequate financial reserves and won't be forced into dramatic budget cuts or tax increases, Gov. Jeb Bush says.

Countering a call by Democrats who insist a special session is needed to revise the state budget, Bush said Tuesday that sales tax receipts are likely to be lower than expected, but he predicted they will still show an increase over last year.

Bush made the comments a day after Democrats in the Legislature called on him to seek the repeal of tax cuts approved earlier this year and impose a series of budget cuts.

Democrats say the $1.6-billion in tax cuts approved by the Legislature over the past three years has created a problem.

"Our budget is coming up short," insisted House Majority Leader Lois Frankel, a Democrat who is running for governor. "It seems to me that Jeb is going to use our savings to pay for tax cuts."

Senate Majority Leader Tom Rossin said the governor's plan to use reserves would leave the state without emergency funds to use if "a real emergency rears its head."

Ninety percent of the Democrats voted for tax cuts they are now questioning, Bush noted.

Bush's budget staff met with reporters Tuesday to go over budget figures after Democrats called for a repeal of tax reductions approved by legislators earlier this year.

The governor's budget experts say Florida is in better shape than most other states where serious cuts, and even tax increases, are being proposed. Many states have reported shortfalls, a problem attributed to a continuing national economic slowdown.

Florida's economy is still growing, albeit much slower than it has in the past few years, insisted Bush communications director Katie Baur.

In addition to the approximately $240-million left in the state's rainy day fund for emergencies, the state has other reserves that can be used for some expenditures and will get the benefit of money that was not spent last year -- an amount that is expected to be more than $100-million, Baur said.

The governor does not anticipate cutting education appropriations and believes the shortfall in expected revenues can be covered by reserves.

State law leaves budget cuts in the hands of the governor and the chief justice of the Florida Supreme Court until a deficit reaches 1.5 percent of the total general revenue budget, or about $300-million.

That means the state would have to be facing a $600-million shortfall before legislators would have to be called into special session, Baur said.

The actual amount of the shortfall will be determined when the state's Revenue Estimating Conference meets Sept. 13.

Legislators predict a deficit that will trigger a special session.

"We have ample reserves," Bush said. "Thankfully, I vetoed wasteful spending in the budget. I don't see any need to make cuts in basic services. We have significant reserves we can use before we have to raise taxes, which is I guess what the Democrats want."

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