PRESS RELEASE February 23, 2001

TALLAHASSEE -- Florida TaxWatch's prediction of a multi-million dollar budget squeeze is coming to fruition, setting the stage for a Darwinian struggle for funding in the 2001 legislative session.

As lawmakers prepare to battle for dollars, the watchdog group is urging them to make taxpayers the winners.

"Funding of our government should not be about survival of the fittest lawmakers - but about serving the best interests of all Floridians," said TaxWatch President Dominic M. Calabro. "The budget squeeze is going to make it more important than ever for lawmakers to balance priorities."

The watchdog group sounded the early fiscal storm forecast in late December with the first of a series of Budget Watch reports. The second report issued today confirms the earlier prediction of a significant budget squeeze.

The report provides a breakdown of Governor Jeb Bush's proposed budget, with direct comparisons to last year's budget. A change in the way the budget was calculated made it much more difficult to draw those comparisons. However, TaxWatch applauds the decision to eliminate "pass-through" dollars and "double-counting" of funding that appears in more than one budget category or agency. Calabro believes it will make the budget much easier to deal with in the long run.

"The bottom line we look at is the rate of spending increase, compared to the rate of personal income growth and inflation," Calabro said. "The Governor's re-based proposed budget indicates a true state spending increase of approximately $1.1 billion dollars, about the same increase in dollars as last year."

In contrast, estimated General Revenues available for new spending in the 2001-2002 budget are drastically lower at just $654 million. The Governor has proposed more than $1.9 billion in redirected General Revenue budget savings to fund his spending priorities and his tax cut proposal.

But there is trouble on the horizon. Increased student enrollment projections combined with an anticipated reduction in the general revenue forecast of up to $300 million mean state lawmakers will have to find even more ways to cut back.

Analysis of the Governor's proposed cuts and allocations is still underway. TaxWatch researchers will publish results of that analysis in a future Budget Watch report.

"The focus must always be on the long-term benefits," Calabro said. "If short-term gains are wiped out by long-term costs, then there is no true value for the taxpayer."

Calabro said proposed tax cuts in the Governor's budget must be measured by the same standard.

"The cut in the intangibles tax is a strong example of this," Calabro said. "We remain convinced that rollback and repeal of this tax serves the best long-term interests of all Floridians. By getting rid of the tax, we open the door to tremendous economic growth which will more than pay for repeal of the tax."

TaxWatch is offering up a slate of its own cost-saving recommendations in escess of $650 million dollars to help meet the estimated $1 billion deficit in funding of necessary programs. The first in a series of Cost Saver reports indentifies more than $250 milion in potential savings.

In addition, TaxWatch is pointing to examples of award-winning, government-cost-cutting measures that could add $400 million in value for Florida taxpayers over the next three years. According to Calabro, those savings could be realized by full implementation of adaptable Davis Productivity Award-winning achievements.

"These ideas must be spread across all areas of state government in order to realize their true value," said Calabro. "Agencies face a true challenge in 2001 to operate more efficiently without sacrificing the quality of Florida's public service."

TaxWatch cost-saving recommendations cover basic services in the seven major program areas the state is required to provide: health and family services, public safety, business, trade and commerce, the environment, housing and general government.