State Politics

Florida budget talks collapse after political brawl

Lobbyists work in the rotunda between the house and senate chambers during session, Tuesday, April 28, 2015, at the Capitol in Tallahassee, Fla. The Florida House adjourns its annual session three days early because of a budget impasse with the Senate over Medicaid expansion.
Lobbyists work in the rotunda between the house and senate chambers during session, Tuesday, April 28, 2015, at the Capitol in Tallahassee, Fla. The Florida House adjourns its annual session three days early because of a budget impasse with the Senate over Medicaid expansion. AP

State budget talks abruptly crashed Monday as angry senators accused House members of breaking an agreement to cut the money that Gov. Rick Scott uses to lure jobs to Florida.

But by nightfall, a key senator called it a misunderstanding and said the Senate would compromise with the House to get negotiations back on track in the second week of a three-week special session.

At the center of the fight was Scott, chairman of Enterprise Florida, the public-private agency that he uses to attract jobs through grants and tax incentives. He wanted $85 million in job incentive money next year for the agency even though it already has $86 million in escrow, set aside for unfinished deals.

The Senate offered Enterprise Florida $30 million next year and the House abruptly raised its ante from $25 million to $39 million Monday, shortly after Enterprise Florida CEO Bill Johnson, a Scott appointee, said the lower amount was “shameful” and would put his agency “out of business.”

A livid Sen. Jack Latvala, R-Clearwater, demanded that the House say why it boosted the total overnight — a change that could divert millions of dollars from projects in lawmakers’ districts.

“We were moving together, up until the dark of night,” Latvala said, berating his House counterpart, Rep. Clay Ingram, R-Pensacola, for not explaining the House’s decision.

The tenor changed considerably later in the day. Latvala met behind closed doors for 45 minutes with House Speaker Steve Crisafulli, R-Merritt Island, and emerged with a new agreement to spend $35 million on incentive programs next year.

“It was a misunderstanding, and it’s going to be rectified,” Latvala said. “I’m going to give him the benefit of the doubt.”

Earlier, Latvala called it “unprecedented backtracking” by the House after staff members worked on a new pay-as-you-go system on incentive deals because the state can’t spend the money fast enough. But his bill to put that system into law and to tighten oversight of incentive deals was a casualty of the regular session when the House quit three days early.

Before a standing-room-only crowd of lawmakers and lobbyists, Latvala refused to let Ingram explain the House budget offer and quickly ended the meeting.

Though it was not discussed publicly, senators were also angry that the House withdrew its support to spend $750,000 to renovate a boat marina in rural Pahokee.

As anger intensified throughout the day, Scott said he might not make a scheduled trip to the Paris Air Show next weekend to seek aerospace jobs. His office said he’ll make a “game-time decision” whether to go.

At an event in Tampa before budget talks collapsed Monday, Scott said: “I’ve been very clear about our priorities. I’ve always let them know they can just pass my budget that I gave them back in January.”

That won’t happen. The bad blood in the Capitol offered fresh evidence of the resentment senators have toward Scott, a fellow Republican, who sided with the House to kill the Senate’s top priority of expanding health insurance to low-income Floridians.

Scott suggested the Senate plan would require higher taxes. He also infuriated senators by threatening to veto their bills if they didn’t support his priorities and for issuing dire warnings of a “government shutdown” because of the lack of a budget.

As a result, Scott will not get the nearly $700 million in tax cuts he promised Floridians on the campaign trail last fall. Nor will he get the “record” funding for public schools he promised, and the Senate refuses to consider his model that relies on local property taxes, not state taxes, to draw down matching federal money to reimburse hospitals for treating poor patients.

Ingram, 37, who bore the brunt of the Senate’s wrath, played on Florida State’s 1999 national championship football team and was handling a high-profile budget conference committee for the first time.

Senators said the House was doing Scott’s bidding on jobs money to get even with the Senate, which has resisted demands by Scott and the House for a higher level of tax cuts that now appear in jeopardy more than ever.

Lawmakers made progress over the weekend, but Monday began with Enterprise Florida CEO Johnson cajoling his board members on a conference call to twist individual lawmakers’ arms to get more money for the agency.

Enterprise Florida received $66.5 million this year for incentive deals. A Senate analysis shows it spent $9 million through Sunday, but Johnson said $42 million is committed to firms and will be paid after they meet performance criteria of jobs and capital investment.

Once that money is exhausted due to those commitments, there will be nothing left to land future projects under the Senate’s plan, Johnson said.

“If we’re not going to have the dollars to make this happen, then why do we exist?” Johnson said. “I’m at a loss to understand why legislators don’t better understand this… That’s shameful.”

Latvala wasn’t buying it.

“It’s just irresponsible to put the money in the budget when it’s not going to get spent,” he said.

The Senate analysis showed Enterprise Florida spent $18 million of $98 million budgeted for incentives in fiscal 2014, and $19 million of $156 million in fiscal 2013.

Enterprise Florida’s Quick Action Closing Fund is by far the largest of eight incentive programs and the most secretive, with the state approving confidential multimillion dollar grants to companies that agree to relocate to Florida, expand or retain jobs.

Latvala, who was in the Senate in 1993 when the Legislature and Democratic Gov. Lawton Chiles created Enterprise Florida, also criticized the agency for relying more on taxpayer dollars than private donations in contrast with its original mission.

Times/Herald staff writers Jeff Harrington and Jeremy Wallace contributed to this report. Contact Steve Bousquet at bousquet@tampabay.com or (850) 224-7263. Follow @stevebousquet.

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