State: Budget back on cutting boar

TALLAHASSEE -- Having spectacularly failed once to bring Florida's budget into balance, a more sober and determined Legislature will try again in a second special session beginning Tuesday.

The budget cuts will be deeper, touching the frail elderly, teachers, students, probation officers and juvenile offenders. But legislative leaders say they will get the job done, without the angry finger-pointing that dominated a special session last month.

A key to the compromise is a concession by many Republicans to postpone for 18 months another cut in the intangibles tax on stocks, bonds and other investments. Gov. Jeb Bush threatened to keep his fellow Republicans in the Capitol until they vote to postpone the tax cut.

"I want to see it completed," Bush said. "I've told the leadership that if there's not a deferral of the intangibles tax, and if there's not $1-billion of immediate cuts, they're not finished, and they've agreed."

Bush personally lobbied to support an 18-month "deferral" of the latest tax cut and says he has the 61 votes he needs, all from his fellow Republicans in the House. The Senate had favored a deferral all along, which was part of the reason the first session collapsed in disagreement.

Chastened by criticism from constituents and editorial writers, lawmakers are talking nice again. Gone are the verbal missiles of October. The sequel is being scripted so it has a peaceful ending, and word of regular telephone communications between the Senate president and House speaker was hailed as a major breakthrough.

"I'll be surprised if this thing isn't some sappy love scene," says Senate Majority Leader Jim King, R-Jacksonville.

The reality is, legislators have run out of time. The Christmas season is approaching and the 2002 session must begin in January to allow time for redrawing legislative and congressional districts.

The Capitol was quiet in a holiday-shortened week. While staffers drew up lists of possible reductions, lawmakers carved up Thanksgiving turkeys with families and friends.

A different cornucopia awaits: a buffet of budget cuts totaling $1.3-billion.

Hearing aids for the poor, medicines for the sick, and scholarships for the bright are all on the chopping block. Class sizes could expand in some counties, and an extended school year could shrink in others as legislators try once more to agree on cuts to make up for what the recession and the terrorist attacks did to Florida's revenues.

Lawmakers first tried to fix the deficit last month, but a special session ended abruptly. Rather than work with what he called an uncompromising Senate, House Speaker Tom Feeney told his members to pass the Senate version of a new budget, but without a delay in a tax cut the Senate demanded. Feeney then sent House members home.

Feeney's move was hailed as shrewd by House loyalists. But Senate President John McKay called it "immature" and "cockamamie" for Feeney to sidestep the time-honored system of taking lingering budget disagreements to a conference committee made up of House members and senators.

The state was left with $800-million in cuts and a plan most said would fall short. Bush, Feeney and McKay were forced to digest the morning-after editorial page reviews that they allowed personal conflicts to override their public responsibilities.

Bush coaxed the leaders into a compromise to cut at least $1-billion from the budget and save $128-million by postponing the tax cut on investments.

McKay wanted to repeal the tax cut outright and use the savings to avoid some budget cuts. Feeney and other House conservatives opposed even a delay. Some, such as Reps. Johnnie Byrd of Plant City and Mike Fasano of New Port Richey, went further, saying that to defer a tax cut is akin to raising taxes.

Feeney also opposed delaying the tax cut, but he agreed to let members vote on it, a signal that invited Bush to corral votes to his softer position.

"I think we'll be all right," McKay says. "I don't foresee problems, but I think there will be significant debate on the items that are very important."

With a belated deal to delay the tax cut, lawmakers now have an agreement on a bottom line figure. House members plan to pass cuts they had approved in the first special session and send them to a conference committee, Feeney spokeswoman Kim Stone says.

Because of the agreement on the intangibles tax cut, Stone said House leaders want to restore some programs to their original $1.3-billion cutting plan, while senators will have to add cuts to their $800-million blueprint from last month.

"There's always bumps. But I don't really anticipate any major problems," said House Majority Leader Jerry Maygarden, R-Pensacola. He did predict "spirited discussion" from House conservatives who don't want to delay the cut in the intangibles tax.

Advocacy groups, fearful that any cuts agreed to by the House and Senate will go too far, are already floating alternate budget plans.

Florida TaxWatch, a private watchdog group supported in part by grants from some of the state's largest businesses, proposed a package of $1.1-billion in savings through what its president, Dominic Calabro, called "efficiencies."

"We must maximize governmental efficiencies in lieu of eliminating critical programs," he said.

Some of TaxWatch's ideas are improbable for political reasons. For example, TaxWatch suggested $56-million could be generated by levying bigger fines against overweight trucks, a step Calabro acknowledged would mobilize the trucking lobby.

Another TaxWatch proposal: more aggressive searching for missing parents and relatives of foster children in the child welfare agency's Pinellas County district. TaxWatch says that would save $1-million locally, and $7.5-million if done across the state.

At the same time, Democratic legislators proposed their own fees and surcharges, including a call for outright repeal of the intangibles tax cut instead of cutting services.

"Our constituents are demanding that we come forward with some ideas," said House Democratic Leader Lois Frankel of West Palm Beach.

Democrats borrowed liberally from TaxWatch's playbook. They also endorsed steeper fines for overweight trucks, the closing of some tax exemptions, a delay in a corporate tax break for companies that donate to private schools, and more borrowing from a state reserve fund.

And if Republicans don't want to repeal the intangibles tax cut, Democrats proposed an alternative: raising the tax rate for the wealthiest Floridians while keeping the exemption lawmakers passed last year. That would generate $600-million this year alone, they said.

Proposing a list of alternatives to deep cuts does more than give Democrats a chance to say they tried to stave off the cuts. It also gives Frankel, a candidate for governor, a chance to tell voters that unlike Bush, she offered a specific plan to close the deficit.

Bush was widely criticized for not giving lawmakers a blueprint for cutting the budget when he called them into the first special session last month. He did offer some general guidelines for cuts, but Bush said McKay and Feeney asked him not to put forward his own detailed plan.

Frankel said she's not thinking of the political benefits of the proposal.

"At this point," she said, "you put politics aside."

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Lucy Morgan

From the Times state desk