State: Bush lists principles for state budget cuts

TALLAHASSEE -- Gov. Jeb Bush on Tuesday framed the budget crisis as a defining moment for legislators and laid out seven principles to follow as they search for cuts to fix a shortfall pegged at $1.4-billion.

"None of us asked for or could have anticipated this situation," Bush said of the Sept. 11 terrorist attacks that have weakened the state's tourist-dependent economy. "But we can address it now -- either by showing leadership or by abdicating it."

Ticking off his priorities, Bush said lawmakers must determine the size of the shortfall, protect public school students and frail and vulnerable residents, delay programs that have not yet begun, forgo pay raises for the highest-paid state workers and develop a sense of "shared sacrifice." He also declared tax increases off limits.

He ordered his own raise -- and those of other senior managers, due Nov. 1 -- to be suspended. That's worth about $3,000 to the governor.

Bush drew fresh criticism for his refusal to say whether the latest cut in the intangibles tax on stocks and bonds should be delayed. A number of lawmakers in both parties say the $120-million cut is a luxury the state can't afford and should not take effect in January.

"I think shared sacrifice certainly includes rich folks, and the intangibles tax certainly benefits those who have higher incomes and higher assets," said Sen. Jack Latvala, R-Palm Harbor, who said the rest of Bush's priorities seem "reasonable."

"If he means we're not going to do away with the intangibles tax cut, that's inexcusable," said Senate Democratic leader Tom Rossin, D-Royal Palm Beach.

His call for sacrifice seemed aimed directly at lawmakers whose pet projects Bush has liberally vetoed for three years in a row.

Bush said across-the-board budget cuts would be wrong. He singled out classroom instruction and social services as two areas that should be safeguarded, but those two areas together make up for 78 percent of the budget supported by state taxes.

"When it's the largest portion of the budget, it's going to be the largest portion of the hit," said Senate President John McKay, R-Bradenton. "Anything else would be a mathematical miracle."

McKay laid out a proposed three-week timetable, saying it was important to move deliberately. "I don't want to rush it," McKay said. "Those are surgical cuts we have to make, not meat-cleaver cuts."

The first step is to figure out the size of the problem.

Bush ordered the state's economic forecasters to meet next Monday to get a better picture of the problem in the wake of the attacks. The governor said he will set dates for the session later this week and is likely to call lawmakers back to work the week of Oct. 22.

Edward Montanaro, coordinator of the Legislature's Office of Economic and Demographic Research, told House Democrats on Tuesday that the revenue shortfall has doubled since mid September.

"Right now we're looking at $1.4-billion," Montanaro told the Democratic caucus.

The days just before a special session can be a perilous time because a clear consensus is considered crucial to avert chaos when the session starts. As governor, Bush has the power of the bully pulpit, but he also must guide McKay and House Speaker Tom Feeney, R-Oviedo, to common ground.

McKay said he could support a delay in the intangibles tax cut, but Feeney has said tax cuts help stimulate economic growth during a downturn. Feeney said through a spokeswoman that Bush's goals "are consistent with where I believe we should be heading."

Some lawmakers speculated that the fact that a date for the start of the session has not been set shows that the three are far from a consensus, either on the scope of the problem or how to fix it.

"From what I can tell, the House doesn't have a plan yet," said House Minority Leader Lois Frankel, D-West Palm Beach. "I don't think there is a concrete plan yet."

Frankel, one of Bush's fiercest critics over the past three years, heaped praise on him Tuesday for his handling of the problem so far. After meeting with Bush for 45 minutes, Frankel said all sides should work together to solve the crisis.

"I was impressed," Frankel said. "I believe he sincerely understands the serious nature of our budget problem and that there are potentially very harsh consequences for people."

Trying to score political points now "would be a very bad mistake," Frankel said. "Our obligation is to fix the problem, not to say, 'I told you so' or 'Gotcha.' "

But Florida Democratic Party Chairman Bob Poe again chided Bush for his unwillingness to commit to a delay in the tax cut for investors.

"The only people who can breathe easier from the governor's newfound principles are those with large stock portfolios," Poe said.

-- Times reporter Alisa Ulferts contributed to this report.

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