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Business Observer Friday, Feb. 22, 2008 14 years ago

WALSH: Economists go to the mat

It wasn't exactly the finals of "American Idol" or "Dancing with the Stars," but it was sure to have some good drama. As we write this, it's a few days before the Battle of the Economists was to take center stage Monday, Feb. 25, in the Senate Office Building in Tallahassee.

Economists go to the mat

By Matt Walsh, Publisher

It wasn't exactly the finals of "American Idol" or "Dancing with the Stars," but it was sure to have some good drama.

As we write this, it's a few days before the Battle of the Economists was to take center stage Monday, Feb. 25, in the Senate Office Building in Tallahassee.

In the ring: three longtime Florida economists - Hank Fishkind of Fishkind & Associates, David Denslow of the University of Florida's Bureau of Economic and Business Research and J. Antonio "Tony" Villamil, president of Coral Gables-based Washington Economics Group, Enterprise Florida board member, former chief economist long ago for the defunct Southeast Bank in Miami and longtime Bush family supporter.

The combatants: Fishkind and Denslow against Villamil.

Or, you might say it's a fight between the ghosts of politicians past - former Gov. Jeb Bush vs. former Senate President John McKay of Bradenton.

At issue: McKay's proposal as a member of the Florida Taxation and Budget Reform Commission to lower and broaden the state sales tax by eliminating long lists of special-interest exemptions (i.e. services) and also eliminate the local school property taxes. This was the proposal McKay tried to nudge through the Legislature when he was Senate president in 2001-2002, only to run into a powerful opponent, Gov. Bush.

Bush dissed McKay's idea, saying, among other things at the time, that it would amount to a tax increase. McKay says his proposal would have been revenue neutral and at the time had Fishkind do an analysis to prove it.

McKay lost, Bush won.

But McKay's idea has come back again - this time before the Tax and Budget Commission, of which McKay is a member.

On Feb. 12, the commission's Finance and Taxation Committee - on which McKay sits - was set to address McKay's proposal. That's when the opening punch was thrown.

Unbeknown to the members of the committee, the commission chairman, former House Speaker Alan Bense (and a Bush supporter), had hired Villamil at $10,000 a month, in part to study McKay's proposal. Villamil appeared before the committee and pronounced that McKay's plan would cost the state 53,000 jobs a year because of a sales tax on services.

McKay was stunned (as were others on the committee) - that Villamil came out of nowhere and that he came up with a number for lost jobs.

McKay didn't sit back. He questioned Villamil whether his analysis included the effects on the economy of cutting Floridians' property taxes by 25% to 40% - the percentage of local school taxes on properties.

It did not.

At that point, McKay asked the committee to postpone any vote or further discussion until he could have Fishkind and Denslow present to offer their side of the story.

It gets deeper. When you look at the Finance and Taxation Committee, there are clear political fault lines. Of the 11 members on the committee, five are clearly in the Bush-special interest business groups-anti-services tax camp (see box). Two are with McKay, and the remaining three could be categorized as undecided.

McKay's proposal needs six votes to move it in front of the entire 25-member commission. And then it needs 17 votes to be placed on the state ballot.

Next week: Who won - Fishkind-Denslow (McKay) or Villamil (Bush).


The McKay Camp

• John McKay
- Manatee County real estate broker, served in the Florida Senate from 1990-2002 and served as Senate president for the 2001-2002 term.

• James Scott - founding partner of the Tripp Scott Law Firm in Fort Lauderdale, elected to the Florida Senate in 1976 and served more than 24 years, including two terms as chairman of the Appropriations Committee and one term as Senate president; also was chairman of the Taxation Committee for the 1997-98 Constitution Revision Commission.

• Ken Wilkinson - Lee County property appraiser, author of the 1992 Save Our Homes constitutional amendment and now organizing chairman of the Enough Is Enough State Spending Limitation Initiative.

The Anti-Services Tax Side

• Susan Story, Chair
- President/CEO of Gulf Power Co., immediate past vice chair of Enterprise Florida, chair-elect of the Florida Chamber of Commerce and serves on the board of directors of the Florida Council of 100 and James Madison Institute.

• Hoyt "Barney" Barnett - Vice chairman, Publix Super Markets Inc., served as chairman of Florida TaxWatch and Tampa Bay Partnership, board member of the James Madison Institute; also served on the 1990-92 Taxation and Budget Reform Commission and the Property Tax Reform Committee.

• Patricia Levesque - Executive director of the Foundation for Florida's Future (former Gov. Bush's foundation) and also managing partner of Meridian Strategies LLC; served as deputy chief of staff to Gov. Bush.

• Randy Miller
- Executive vice president of the Florida Retail Federation, former executive director of the Florida Department of Revenue, served on the Sales Tax Exemption Study Commission and the State Tax Reform Task Force; has served as a board member of Florida TaxWatch.

• Brian Yablonski - Vice president of public affairs for the St. Joe Co. He previously served as director of policy and deputy chief of staff for Gov. Bush.

The Willing to Consider Side 

• Martha Barnett - partner, Holland & Knight, served on the 1990-92 Taxation and Budget Reform Commission, the Florida Sales Tax on Services Study Commission and the 1997-98 Constitution Revision Commission.

• Bruce Kyle - 20th Circuit Court judge in Fort Myers, elected to the Florida House in 1998, where he served as vice-chair of the Legislative Budget Commission. 

• Julia Johnson - President of NetCommunications, appointed by Gov. Bush as Chairman of the Florida Information Technology Development Task Force (Internet Task Force) by Governor Bush. Johnson also served on the Public Service Commission.

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