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Economic event turns political

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By MARTIN DYCKMAN

© St. Petersburg Times,
published September 9, 2001


TALLAHASSEE -- Meetings of the Florida General Revenue Estimating Conference normally are, as one participant once put it, "dry as toast." The press comes for the results, avoiding the daylong discussions that would lull them to sleep.

But when the conference next meets Thursday, reporters will be alert, armed with tape recordersand ready.

The General Revenue Estimating Conference is about to become a political event. House Speaker Tom Feeney saw to that by delegating not an economist but his chief political aide, Paul Hawkes, to one of the four conference seats.

That's bad news. For at least 30 years, the process has been distinguished by increasing professionalism and nonpartisanship. The governor, House and Senate might disagree often over how much money to spend and where to spend it, but never over how much would be available.

The answer to that question is crucial to everything the state government does. The Constitution requires a balanced budget and prohibits deficit financing. If revenue disappoints, spending has to be cut accordingly.

The forecasts have usually been satisfactorily close to the mark, erring most often on the side of caution -- which is to say, to underestimate -- but they can easily go wrong. Economics is imprecise, and Florida, which relies on consumer taxation more than most other states do, is hypersensitive to such unpredictable events as hurricanes, freezes and even shark attacks (bad for tourism) as well as to longer-term recessions and inflation. But so far, everyone has credited the professional forecasters with trying sincerely to guess right.

That presumption of confidence is what the Hawkes appointment puts at peril. Hawkes, a former House member, is a lawyer, not an economist. His position as Feeney's policy director is political in purpose. He has no more business at that conference table than the state Republican chairman would.

Meanwhile, tax receipts are already running well below the predictions on which the budget was based last spring. If the projected net deficit after reserves reaches a certain size -- 1.5 percent of the general revenue budget -- the law requires the Legislature to convene to cut more from the budget or raise more money. There is nearly $300-million in ready reserves but Democratic leaders and even some Republicans now expect the overall deficit to be at least twice that, which would trigger the special session.

Gov. Jeb Bush and Feeney want no special session where the Democrats who fought Bush's tax cuts last spring would be sure to try to postpone or cancel them. The $150-million intangibles tax cut could easily be repealed or at least postponed because payments aren't due until January. The Democrats would frame it as the only alternative to putting more screws to the schools and Medicaid.

But if the Revenue Estimating Conference can't agree on the projected deficit, then the special session is a moot point. That's why the Democrats all but jumped out of their skins when they heard that Feeney had appointed Hawkes to the conference in the stead of a qualified economist who had left the House staff. There is no precedent for a disagreement. The conference has always acted by consensus. Its members have vetoes, not votes.

"I hope that you will agree that the Revenue Estimating Conference process should be free from politics," Minority Leader Lois Frankel protested to Feeney last week. "Because of the implications on services Florida provides to our citizens, the Revenue Estimating Conference should be a forum to produce true numbers, not political spin. That is why the Revenue Estimating Conference has traditionally been composed of individuals with experience in revenue forecasting. In fact, Section 216.136, Florida Statutes, requires the appointment of professional staff with forecasting expertise. . . .

". . . While Mr. Hawkes serves the House with distinction and capability, I am not aware of any fiscal or economic expertise that would qualify him to participate in this important endeavor. Unfortunately, I fear the possibility that Mr. Hawke's involvement in the conference would have the appearance of politics rather than objective economic forecasting."

It wasn't just Democrats fretting.

"It sounds to me like they're looking for a political decision, not a fiscal one," said Sen. Jack Latvala, R-Palm Harbor, who was majority leader under former President Toni Jennings.

Feeney wasn't moved, though he was left with egg on his face for telling one newspaper that Hawkes had the requisite experience from having chaired the House Appropriations Committee. Hawkes never served on that committee. Hawkes did draft the first Republican budget. But Republicans were a minority then and their budget was meant as propaganda.

Hawkes is in a tougher spot now. What he does Thursday won't be for show but for real. It had better be right.

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