State: Bush calls session on $1.4-billion shortfall

TALLAHASSEE -- Gov. Jeb Bush on Wednesday called legislators into a two-week special session beginning Oct. 22 to confront a $1.4-billion budget shortfall amid growing tensions between House and Senate leaders on how to resolve the problem.

House leaders embraced across-the-board budget cuts, while Senate Republicans insisted on "surgical" cuts that protect politically popular programs, such as education.

Like the Senate, Bush calls across-the-board budget cuts "a mistake" and says classroom instruction and services to vulnerable residents should be insulated from cuts as much as possible. But Bush downplayed the rifts between the House and Senate.

"There is going to be a consensus. There is not going to be a train wreck at the end," Bush insisted.

Republicans in the House and Senate clashed over whether the latest cut in the intangibles tax on investments should be delayed, whether rainy-day reserves should be used to patch the budget hole and whether cuts should be imposed equally on all agencies.

House Speaker Tom Feeney, R-Oviedo, restated his opposition to repealing the latest cut in the intangibles tax. But Senate President John McKay, R-Bradenton, called such a step "a probability," and Bush, while noncommittal, said he would consider it.

The disagreements among the Republicans, who control the House, Senate and governor's mansion, surface as the state faces its most serious budget crisis in a decade. The shortfall in 1991 required a contentious series of four special sessions, $949-million in cuts and a hodgepodge of tax and fee increases.

The normally loquacious Feeney was strangely silent as Bush announced the details of the session. The speaker declined to take questions at a budget briefing, and aides whisked him out of Bush's news conference and into an elevator before he could take questions.

Feeney's point man on the budget, Rep. Carlos Lacasa, R-Miami, championed a one-size-fits-all cut of at least 7 percent in all programs.

"An across-the-board cut is the easiest and least political way to solve this problem," said Lacasa, chairman of the House Fiscal Responsibility Council. "I don't want a war between members protecting turf, or between agencies or between interest groups. We really have to let everybody share the pain here."

At a morning caucus with Democratic senators, McKay rejected across-the-board cuts as "a meat cleaver approach" that would unfairly punish education and human services, which together account for nearly 80 percent of the state budget supported by taxes and which have influential lobbyists.

"We won't be doing that, so we may be here longer than 12 days," McKay said. "That's sort of a meat cleaver approach. You wouldn't run your business that way. We're going to be discriminating as much as we can."

Lacasa said House leaders resisted agreeing to a special session in part because of a wariness about McKay. The two chambers' leaders clashed repeatedly last session on budget and tax issues.

"There's no negotiating with the man unless you have some serious leverage," Lacasa said of McKay, "and we give up a great deal of leverage if we agree to a call" for a special session.

The discord among Republicans has been loud enough for Democrats to hear. Rep. Bob Henriquez, D-Tampa, asked about it after Lacasa discussed the budget cuts with House Democrats.

"It's very different for us not to be saying the same thing, the House and the governor," Henriquez said, referring to the House GOP leadership.

Rep. Evelyn Lynn, an Ormond Beach Republican and a key lawmaker on the state's education budget, said she thinks across-the-board cuts would inflict too much harm on education.

"We have made a philosophical statement in this state that our No. 1 priority is education," Lynn said.

A possible compromise, Lacasa said, is to make initial cuts and then "buy back" certain programs. The state could find some money for that in trust funds that are supported by fees, not taxes, but lawmakers would have to pass new laws allowing trust fund money to be used for other purposes, Lacasa said.

House leaders differ with McKay and Bush on another issue guaranteed to produce a fight: whether the state should delay its latest round of cuts on its intangibles tax on stocks and bonds. Lacasa said delaying the tax cut would save between $120-million and $130-million, less than 10 percent of what he said lawmakers will have to cut.

Lacasa said repealing the tax cut, which House Republicans have called an "immoral" tax on seniors and savers, is bad policy. But he knows it's a hard sell with other lawmakers.

"Intangibles will be a tough fight in the Senate," Lacasa told House leaders. "Even the governor's beginning to cave on this."

Feeney, who has designs on a campaign for Congress in 2002, is so opposed to repealing the intangibles tax cut that he had an oversized lobbyist registration form brought to the House chamber for a GOP caucus. There, he signed the form, declaring himself an official lobbyist for the state's seniors and savers.

He later released a statement to stress the point.

"I am committed to protecting any tax relief in place, and oppose as a very bad idea repealing or delaying any cuts to taxes scheduled for the upcoming year," Feeney said.

Feeney's stand on tax cuts contrasts even with that of Bush, who has said consideration of delaying the tax cut should be "on the table."

Bush said other pressing issues of heightened security and economic incentives to revive the state's economy might still be added to the special session, but his proclamation dealt only with the budget.

It said: "The Legislature of the state of Florida is convened for the sole and exclusive purpose of considering the reductions to this fiscal year's appropriations from the general revenues of the state that are needed to deal with the anticipated decline in the aftermath of these acts of terror."

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Lucy Morgan

From the Times state desk