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Lobbyists plan war on new tax proposal

Business representatives gather to mount an all-out assault on Sen. John McKay's tax reform measure.

By STEVE BOUSQUET, Times Tallahassee Deputy Bureau Chief
© St. Petersburg Times
published December 28, 2001

TALLAHASSEE -- For three hours Thursday, more than a dozen influential lobbyists laid the groundwork for an all-out campaign to defeat Senate President John McKay's tax reform plan.

Two people at the meeting, Sally Bradshaw and Cory Tilley, are former top aides and campaign advisers to Gov. Jeb Bush, which is sure to stoke speculation about the governor's position on tax reform.

Bush has expressed worry about how a drawn-out debate over taxes could stymie investment in the state, but he has not come out for or against McKay's plan. A spokeswoman reiterated that view Thursday.

"The governor's position has not changed, regardless of who was at what meeting," Katie Baur said. "It's a big idea and it deserves some thought. We'll keep an open mind."

McKay, R-Bradenton, has proposed an ambitious overhaul of the 1949-era tax code that would broaden the tax base by wiping out tax breaks enjoyed by narrow interests while at the same time cutting the sales tax from 6 percent to 4 percent. He says the state's recent fiscal squeeze is dramatic proof of the need to restructure the tax base, and he is seeking legislative support to put a constitutional amendment on the November 2002 ballot.

Opposition to McKay's idea is rapidly snowballing among the powerful business lobbies even before McKay can get a bill filed in the Legislature. House Speaker Tom Feeney, R-Oviedo, has voiced doubts, and McKay must gain the approval of three-fifths of the members of each house of the Legislature.

The governor has no power to veto a proposed constitutional amendment. But Bush, as the state's chief executive and the Republicans' standard-bearer as he seeks re-election next year, would unavoidably be drawn into the tax debate. Some supporters worry how the presence of a controversial tax question on the November 2002 ballot would affect voter turnout.

That was one of a number of issues discussed over a lengthy lunch.

With the Capitol quiet and lawmakers out of town for the holidays, lobbyists convened at the Plantation Room of the Governor's Club. On hand were representatives of banks, sugar growers, broadcasters, Realtors, accountants and small business owners -- many of whose services are currently exempt from the sales tax.

A leading organizer was lobbyist J.M. "Mac" Stipanovich, a former chief of staff to then-Republican Gov. Bob Martinez, whose handling of the 1987 tax on services helped cost him re-election. Stipanovich works for a law firm, whose services could be taxed under McKay's proposal, and he lobbies for U.S. Sugar Corp. and various other clients.

Stipanovich referred questions to Tilley, a former deputy chief of staff to Bush, who left the administration last year to work for a Tallahassee public relations firm.

"These are people who really believe this is a tax increase on Floridians, and a tax break for out of state tourists," Tilley said. "I think the goal is to inform the public of that. This could have a very negative impact on small businesses and on homeowners in Florida who pay these taxes."

In an end-of-the-year interview with reporters last week, Bush voiced concerns about the timing of McKay's proposal.

"The timing is not great for this because of the economic conditions," Bush said. "If it was to pass in some form, I would argue that we should act immediately. If we allow for two years this debate to go on, you're going to stymie investment in this state."

The opponents discussed plans to form a umbrella coalition quickly, in hopes of stopping McKay's proposal in the House. They also brought a lawyer who advised the lobbyists on what steps to take to form a political action committee in compliance with state law.

Others attending included Randy Miller of Associated Industries of Florida; insurance lobbyist Paul Sanford; Pat Roberts of the Florida Association of Broadcasters, which represents local TV stations in lawmakers' districts; Mike Fields of Bank of America; Rick McAllister of the Florida Retail Federation; Fred Martin of the Florida Economic Development Council; Gene Adams of the Florida Association of Realtors; Lance Lozano of the Florida United Business Association; Steve Birtman of the National Federation of Independent Business and Lloyd "Buddy" Turman of the Florida Institute of Certified Public Accountants.

Turman said McKay's plan "recreates" the 1987 tax on services, a debacle with which McKay has painstakingly sought to avoid comparisons.

"This would shift taxes away from tourists and other places where we've been able to export taxes, and puts it squarely on the backs of Floridians and Florida businesses," Turman said. "We don't want to see that happen again."

McKay could not be reached for comment.

Senate Majority Leader Jim King, R-Jacksonville, urged business lobbyists to read the tax plan and suggest improvements, rather than oppose it. King also said businesses appear to be most concerned about protecting the tax exemptions they have now.

"I've told John from the very start, this was going to be an uphill swim," King said. "The problem is that people equate it very quickly with the failed services tax of 1987, but they fail to see that that was, in fact, a tax."

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