250-2001 LTC
CITY OF MIAMI BEACH
Office of the City Manager
Letter to Commission No. 015[), dcol
~
To:
The Honorable Mayor Neisen O. Kasdin
and City Commissioners
Date: November 6, 2001
From: Jorge M. Gonzalez ~ ~
City Manager 0
Subject: Final Legislative Report/Special Session/October 2001
The 2001 Special Session called by Governor Jeb Bush to make budget reductions to the
current fiscal year ended on Tuesday, October 30, 2001. The Governor called the
legislators to Tallahassee to address a $1.3 million billion deficit in the 2001-2002 State
budget. He later expanded the call to include the repeal of the intangibles tax, which
passed during the 2001 Session, economic stimulus initiatives, and issues related to public
security. The final legislative report from the City's State lobbyists is attached for your
review.
Over the weekend, House Speaker Tom Feeney and Senate President John McKay, along
with their respective budget committee chairmen, negotiated a new agreement by
telephone. The new plan calls for $1.3 billion in cuts to state programs and an 18-month
delay of a tax cut on stocks and bonds.
On November 6th, the Governor called another Special Session for November 27 -
December 6 to approve new budget cuts that will replace the budget that the Legislature
approved last week during a tumultuous nine-day session that ended with Speaker Feeney
pitted against Senate President McKay. The House and Senate have agreed to delay the
intangible tax cut until 2003, to make an additional $200-300 million in additional cuts, and
not to draw from the Budget Stabilization Fund.
JMG\djfc\~\ebS
c: Christina M. Cuervo, Assistant City Manager
Kevin Crowder, Economic Development Director
Attachments:
Special Session Report
Miami Herald, November 5, 2001
Miami Herald, November 6, 2001
NOV-02-01 15: 16 FROM:RUTLEDGE ECENIA ET AL
ID:9046816516
PAGE
2
RUTLEDGE, ECENU.. PURNELL & HOFFMAN
PROFESSIONAl ASSOCIATION
ATTORNEYS AND COUNSElORS AT LAW
STEPHEN A. ECeNIA
KENtJlITM A, HOFFMAN
THOMAS W. KONFlAD
MICHAEL G. MAIDA
MARTiN P. Mc:DONNEI.I.
J. STEPHEN MENTON
POST OFFice BOX 551. SZl02-055'
215 SOUTH MONROE STREET. SUITE 420
TALLAHAsseE, FLOFO:JOA 32301.1841
Fl, OA.vtO PRESCOT'!'
MAROLD E X. PUFlNELL
GARV Fl. FlUTLEOaE
TElEPHONE (8S0) 681-"88
TELECOPIER (850) 681-6515
GOVfANMENTA.L OONSUl.TANT$
MAROARET A, MENOUNI
M. l.ANE STEPI"1EM3
To: Mayor Neisen Kasdin
City Commissioners and City Manager Gonzalez
City of Miami Beach
Via: Facsimile to Kevin Crowder (hard copy to follow)
From: Gary Rutledge
Fausto Gomez
Bob Levy
Manny Reyes
Margie Menduni
Date: November 1,2001
Re: Final Legislative Report/Special Session/October, 2001
The 2001 Special Session called by Governor .Teb Bush to make budget reductions to the current fiscal
year ended on Tuesday, October 30 with the House adjourning sine die at 6:30 p.m. The Senate never
fonnally closed their session, but let it IUn out on November I, thc scheduled closure date for the session.
Governor Jeb Bush called the legislators to Tallahassee to address a $1.3 billion deficit in the 2001-2002 State
budget. He later expanded the call to include the repeal ofthe intangibles tax, which was passed during the
2001 Session, economic stimulus initiatives, and issues related to public security.
During the course of the first week of committee meetings to address the budgct cuts, the House and
Senate developed different philosophies relative to the necded reduotions. The House presumed the economy
would continue to worsen and the Statc's deficit during the currcnt year would continue [0 grow. In addition,
the House opposed repeal of the intangibles tax. The Senate targeted the $1.3 billion by cutting $800 million
in General Revenue and repealing the intangibles tax worth $128 million. In addition, the Senate drew fLlnd~
from the Budget Stabilization Fund, otherwise known as the "Rainy Day Fund." Ordinarily, djJJ'crences of
opinion in the budget are common and differences are worked out during the conference process. However,
leadership in both chambers appeared to be "bunkered" intn their philosophies and unwilling to compromise.
As a result, the House never passed its budget, took up thc Senate hudeel, passed it, and ended the session.
This left members of the Senatc angry and unhappy with their own product, in as mLlch as they had intended to
make changes in their budgct during thc conference process. In adclitiun, the House ended up passing a budget
they did not favor.
NOV-02-01 15,17 FROM,RUTLEDGE ECENIA ET AL
ID,9046816516
PAGE
3
RU:I!LEDGE. ECENU.. PURNELL & HOFFMAN
Final Legislative Report/Special Session/October, 2001
Page Two
There are lingering questions as to the constitutionality ofthe budget which passed. The Florida
Constitution requires that both chambers have a 72-hour waiting period prior to final passage of a budget. The
House did wait 72 hours before passing the Senate budget. However, the Senate did not wait the required
hours before it passed the bill and sent it to the House, because the Senate was fully expecting a conference
product which would then sit for 72 hours on their desks. Attorney General Butterworth's office has rendered
an opinion deolaring the budget which was passed unconstitutional.
As this time, there remains a great deal ofunoertainty as to the Governor's actions on this bill. We
will continue to monitor and report to you as developments occur.
The following report will bighlight elements of the budget and a few bills that did pass during this
session.
5B 2-B/GEN"ERAL APPROPRIATIONS FOR FISCAL YEAR 2001-2002
In reducing the deficit the House and the Senate had to look to general revenue for cuts. Whenever
possible, funds were shifted from trust funds to replace General Revenu". Because education and health and
human ~"rvic,,~ have a larger percentage of the overall budget and a large pcrcentagc of General Revenue, they
took a much harder hit. Education cuts totaled $136.8 million for K-12, and $59 million for higher eduoation.
Health and Human SelVices cuts total~d $365 million. General government cuts totaled $66 million. The
budgeL mov~d $300 million from the Stabilization Fund into the Working Capital Fund.
The CitTuB Canker Tr,,~ Replac~ment Program for Miami..Dade County was eliminated ($27.2
million). Miami-Dade County's Grant Funds for Adult Handicapped was cut by $148,403. Thb may impact
the Log Cabin in the City. Miami-Dade County experienced a $1.1 million cut through an increase in the
County's contribution for Medicaid nursing homes.
The budget also contained increases in certain programs to stimulate the economy. As part of an
initiative to accelerate transportation amI school construction and renovation projects to create 30,000 more
jobs, the Wolfsonian received $2.7 million in construction funds for an Emerging Technology Center. Two
projem in Miami-Dade County totaling $13.6 million were part of fllSt-tracked transportation projects totaling
$667.71 million statewide. OM is Statc Road 90/Southwest 8'h Street from Southwest 127'h A venuc to
Southwcst 137"' Avenue and the other is State Road 826 and 1-75 ramp.
Funding was incrcascd for marketing and outreach programs to promotc tourism in Florida totaling
$20 million. Thc funds arc allocated to the Florida Commission on T ourismlVisit Florida nnd must be
matched dollar for dollar through private industry. The Team promoted economio stimulus for the City by
facilitating a meeting between Secretary Griffin, the Florida Lottery, and the City, which may result in both a
long term partnership for promoting tourism at the Beach and tentatively a sponsorship for the NSYNC
concClt at the Beach on November II, 2001. We also arranged for Christina Cuervo to discuss the City's
economic status before the Dade Delegation in Tallahassee October 10,2001.
Funding totaling $13.2 million was also allocated for seourity issues, including fW1ds for regional anti-
terrorism task forces, an intelligence database, training for first responders, scanners tor drivers licenses, and
preparedness equipment. In addition, the Department of Health receive~ $6 million for .~.ockri1ing antihiotios
and oilier drugs needed to fight bioterrorism and to enbance epidemiology laboratories.
NQV-02-01 15: 17 FROM:RUTLEDGE ECENIA ET AL
10,9048818518
PAGE
4
. RUTLEDGE, ECENIA, PURNELL & HOFFMAN
Final Legislative Report/Special Session/October, 2001
Page Three
OTHER :BILLS OF INTEREST WHICH PASSED THIS SESSION
CS for SB 24-B allows the Department of Transportation until July 1, 2003, to inolude right of way
services as part of the design-build contracts and further broadens the list of transportation projects that may be
awarded as design-build contracts.
SB 48-B provides flexibility for airportS whereby funds, from aviation fuel tax previously dedicated to
infrastructure, may be diverted to seourity enhancements.
SB 54-B is intended to reinstitute the parking surcharge for the City of Miami. It addresses sections of
the original legislation passed during the 2001 Session which currently are being challenged in court. There is
no Marlins language attached to the bill and the expiration date of June 30, 2006, remains intact.
The lobbying team will continue to work with the appropriate agencies distributing the $20 million
advertising appropriation to identify South Florida's share. It has been a pleasure to work for the City during
this special legislative session. We will continue to keep you abreast of issues as they develop.
cc: Christina Cuervo
Miami J:Ierald: Leaders revise state budget cutback
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Entertainment
Tuesday, November 6, 2001
News
High 780F Low 640F
Published Monday, November 5, 2001
Leaders revise state budget
cutback
Trims deepened, tax break delayed
BY JONI JAMES AND PETER WALLSTEN
jjames@heraldcom
TALLAHASSEE -- A tax cut for wealthy investors would be
postponed for 18 months, and $1.3 billion would be cut
from the state budget, under a preliminary budget-cutting
agreement that legislative leaders negotiated by telephone
over the weekend.
The governor's office expects House Speaker Tom Feeney
and Senate President John McKay to join Gov. Jeb Bush in
announcing the agreement, if finalized, possibly as early as
today.
If successful, the deal could bring to a close one of the
most embarrassing episodes for Bush, who is up for
reelection next year. The governor, who said he did not
offer his own budget-cutting plan to the Legislature
because Feeney and McKay had asked him not to, came
under fire as the special session fell apart.
The new budget plan, if approved by both Republican-led
chambers of the Legislature in an anticipated special
session after Thanksgiving, would replace the one passed
last week at the end of a rancorous nine-day session. Bush
had called the session to have the Legislature address a
$1.3 billion shortfall in state revenue.
Still to be worked out between the House and Senate are
how much of the budget cuts would come from each sector
of state government, such as education and criminal
justice, said Rep. Carlos Lacasa, R-Miami, chairman of the
House budget committee.
. 'We're easily 90 percent of the way there, but the devil is
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in those details," said Lacasa, who along with Senate I> Visitors' Guide
Budget Chairwoman Lisa Carlton, R-Osprey, brokered the
deal on behalf of Feeney, the House speaker, and McKay,
the Senate president. Carlton could not be reached late
Sunday.
Feeney, over objections from Bush and McKay, abandoned
the normal conferencing process for budget bills and
instead had the House pass the Senate's more modest
$1.1 billion cut plan. But Feeney refused to consider the
other part of the Senate plan -- repealing a $128 million tax
break on stocks and bonds that takes effect in January.
The new budget-cutting plan represents a compromise for
both Feeney and McKay.
McKay would agree to another $200 million in budget cuts,
while Feeney would agree to postpone the so-called
intangibles tax -- a tax break on which both he and Bush
had campaigned. Feeney has said he would not vote for
the deferral himself, but that he would allow his chamber to.
GOVERNOR'S ROLE
Bush, talking to reporters after a briefing on Hurricane
Michelle early Sunday at the state's emergency operations
center in Tallahassee, said he would lobby nervous
Republicans to support the delay.
.. At the end of this, [the tax cut] is the one issue that has
been the stumbling block for a solution to this," said Bush,
who during the special session said he would agree to a
deferral rather than the all-out repeal supported by the
Senate.
"There's a realization that [the tax cut deferral] needs to be
included in the negotiated solution to this," Bush said. "The
speaker has said he would not vote for a deferral so long
as he gives me the chance to go make the case of the
need for it. I will do it, and we'll get it done."
NO WITHDRAWALS
The new plan also would not include any withdrawals from
the state's $941 million Budget Stabilization Fund, a rainy-
day account created by a state constitutional amendment.
Bush and iegislative leaders have expressed concern that
the plan passed last week would have used $300 million of
the fund for cost overruns and cash flow, leaving the state
with less reserves in the event of a disaster, natural or
otherwise.
Last week, as Bush drew criticism from Democrats, some
Republicans and editorial pages for allowing negotiations
among Gap legislators to fall apart, he urged the two
chambers to begin talking again, almost as soon as they
left Tallahassee, and suggested he might even veto the
budget bill.
On Friday, Bush canceled a long-planned trade mission to
Spain in part to stay home and push lawmakers toward a
budget deal. Early Sunday, he appeared eager to show his
efforts had led to progress.
http://www.miami.comlheraldlcontentlnews/local/floridaldigdocs/111302.htm
11/06/2001
}4i~i ~erald: Leaders revise state budget cutback
Page 3 of3
"They're working really hard," Bush said. "This has all
been done now in good faith. I'm not seeing any evidence
of pitting one (lroup [against the other] or trying to win a
procedural POint."
But he said he expects criticism to continue once the
deeper cuts are announced.
. 'The irony of this is the people who have been very critical
of the Legislature and of me are now going to be very
critical of the additional cuts," he said. "The additional cuts
are necessary to develop the cash going forward so that
we can contend with a storm or another act of terror or a
continued downturn in the economy."
111
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Tuesday, November 6,2001
News
High 780F Low 640F
Published Tuesday, November 6, 2001
Legislators to recraft budget
cut
Post. Thanksgiving session is planned
BY JONI JAMES
jjames@herald.com
TALLAHASSEE - Gov. Jeb Bush and legislative leaders
are expected to announce this moming that they've
patched a rift between the House and Senate and will hold
a post-Thanksgiving special session to craft a new solution
for dealing with the state's $1.3 billion revenue shortfall.
Lawmakers are expected to return the week of Nov. 26 for
at least a 10-day session to approve the new budget-
cutting plan that would replace one the Legislature
approved last week during a tumultuous nine-day session
that ended with House Speaker Tom Feeney pitted against
Senate President John McKay.
Bush, along with the legislative leaders, criticized the $1.1
billion cut plan after passage saying it didn't slice enough
from the state budget and used too much of the state's
reserves to shore up the budget.
Over the weekend, Feeney and McKay, along with their
respective budget committee chairmen, negotiated a new
agreement by telephone. The new plan calls for $1.3 billion
in cuts to state programs and an 18-month delay of a tax
cut on stocks and bonds.
The so-called intangibles tax is scheduled to take effect in
January.
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11106/2001