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    Attack may complicate state budget

    By ALISA ULFERTS

    © St. Petersburg Times,
    published September 13, 2001


    TALLAHASSEE -- Florida already was facing a budget squeeze when terrorists struck at the country's financial capital two days ago.

    State officials now are worried that the attack on the World Trade Center's twin towers could erode a hole in the state budget.

    "Up until Tuesday there was no chance (the shortfall) would have had an effect on services," House Speaker Tom Feeney said Wednesday.

    "Tuesday threw a big variable in the equation."

    For weeks, lawmakers have engaged in partisan bickering over the size of the projected shortfall and whether it would be steep enough to trigger a mandatory special session of the Legislature or force cuts in state services.

    A committee of state budget experts will meet as planned this morning to nail down the shortfall figure, which most estimates peg anywhere from $300-million to $800-million.

    Although Tuesday's attacks in New York and Washington silenced the fighting among lawmakers, they only heightened the uncertainty surrounding the state budget.

    "Everybody who's been paying attention had a good grip until Tuesday," Feeney said. "Now we have to be prepared with a capital P and be flexible."

    Florida's economy is heavily dependent on the sales tax tourists pay when they play in the Sunshine State. State officials are wincing at predictions that the attacks could curtail the tourism industry and deprive the state of income at a time when every penny counts.

    Major League Baseball games in St. Petersburg and Miami were canceled, costing the state the tax it collects on concessions and admissions. Major theme parks across the state shut their doors Tuesday, a move that likely cost the state less than $1-million, according to the state Department of Revenue. But what happens when those tourists stay away, either because they are afraid to fly or some economists' predictions of a recession are realized?

    Gov. Jeb Bush predicted that will be a topic discussed at this morning's meeting, but only speculatively.

    "There's no way to know what kind of impact this will have two days after the fact. They're good, they're not that good," Bush said, referring to state economists.

    "I think it's going to be difficult to make an accurate assessment of the impact of what happened yesterday on our economy. What they (the committee) can talk about and should talk about is Sept. 10 and go backwards," Bush said.

    The forecast is shaky. Bush has taken the extraordinary step of holding back 1 percent of the budgets for some executive branch agencies in the first quarter of the fiscal year that began July 1. (But Bush and legislative leaders have promised that education will not be affected.)

    By law, the Legislature must meet if a budget deficit reaches 1.5 percent of the general revenue part of the state budget, which is about $20-billion. Budget experts for the Legislature say that would make the deficit trigger $300-million.

    Like Bush and Feeney, Senate President John McKay said it's too soon to know the full impact Tuesday's attacks will have on Florida's economy and budget. But he doesn't doubt that the state will feel it.

    "It's no question it's going to have an effect," McKay said.

    House Minority Leader Lois Frankel repeated her position that tax cuts passed by the Republican-led Legislature in recent years have contributed to the shortfall. On top of being concerned about the economic effects of Tuesday's terrorist attacks, Frankel said she's worried that Bush and the Legislature may want to use the state's rainy day reserves to resolve the shortfall.

    "That's the reason we have these rainy day funds -- in case something unexpected happens," Frankel said. Although she won't be at this morning's conference, Frankel said she hopes both sides can put away their differences.

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