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Modest Proposals
This month, Gov. Lawton Chiles takes his progressive agenda to the Legislature. But Republican majorities in both chambers promise to make the session a difficult one for the second-term governor.
Already in recent years, Chiles has had to make big concessions to GOP lawmakers on key initiatives like tax reform. Now, conservative winds are blowing through the Capitol harder than ever.
But Chiles isn't giving up on his New Democrat ideas. His biggest single initiative, a dime-a-pack cigarette tax hike, combines his passion for children's issues with his all-out war on Big Tobacco. The money would go for an anti-smoking program known as TEACH (Tobacco, Education And Child Health).
To break down GOP resistance to taxes, Chiles also is pushing a largely symbolic "lap-dancing" tax on adult entertainment, something family-value-conscious Republicans might find irresistible.
In a recent interview with Florida Trend editors, Chiles discussed those issues, along with a variety of other legislative topics. They include:
• Funding for higher education,
• Welfare reform, which depends on finding jobs for hundreds of thousands of unemployed and underskilled people, and
• The so-called intangibles tax that Florida imposes on many types of securities. The tax, never popular with many businesspeople or economists, is riddled with loopholes. Some GOP leaders want to do away with it.
Enterprise Florida
Background: Chiles' budget proposes a 10% increase in funding - to $25.7 million - for Enterprise Florida, the public-private partnership that coordinates economic development for the state. The budget also calls for a new $16 million "Sector Strategy" program - coordinated through Enterprise Florida. Of the $16 million, the governor's budget dedicates $5 million to target job growth in so-called "high impact" businesses like aerospace, chip fabrication and microelectronics; $5 million to help develop small businesses, and $6 million to promote energy efficiency.
In hearings this winter, legislators questioned whether Enterprise Florida was meeting legal requirements to draw up accountability standards for the agency, and criticized its reluctance to provide information on $40 million in venture capital that Enterprise Florida has distributed.
FT: Enterprise Florida seems to be getting an unpleasant reception in the Capitol. Is this a breakdown of the bipartisan spirit that Enterprise Florida enjoyed?
Chiles: I think this is a rite of passage, an initiation, you might say. It's easy pickings for the Legislature. They get good press banging on people, and obviously, it looks like Enterprise Florida did not do its homework - the little things to get their paperwork straight.
I've been through this before with John Reitzammer (executive director, Florida Entertainment Industry Council). They just blew him away. Well, he just got a wonderful hearing (before the Legislature) because he created $600 million (worth of business). It's working, and we can show that it's working.
With Enterprise Florida, I think this is a temporary thing. I don't think (the bipartisan support) has changed at the leadership level.
FT: Is the burden of helping to implement welfare reform too heavy for Enterprise Florida?
Chiles: The whole key as to whether welfare reform works or not is whether there is going to be a job at the other end of the ladder (for the people coming off welfare). And I think you can say there will not be unless the private sector is very, very much involved.
FT: Have you been satisfied with the private sector's reaction and contributions to Enterprise Florida?
Chiles: I think it's too early. I think Enterprise Florida enjoyed some good support at the Council of 100 level, but an awful lot of the business community in Florida doesn't know about it yet. Is it where it needs to be? No. But I think it's hard to say I'm dissatisfied, given where we are in history. I think it still has high promise, but whether it will work or not? Hell, it's new.
Welfare Reform
Background: Chiles wants to create a new $6 million Job Placement Success program to reward organizations and programs, such as One Stop Centers and Welfare-to-Work, that place welfare recipients and displaced workers in jobs.
FT: How about the business community's response on welfare reform itself? Are you seeing enough enthusiasm about finding enough jobs for people?
Chiles: I don't think so, but I think it's hard to fault them now because I think we've got to do a lot of information work, PR work. They have to understand that all of these are things that (they've) been demanding and wanting to happen - changing the welfare mentality, all of that.
Then they need to look at the numbers. And they need to look at preserving certain entry level jobs that they are going to help us make available to (the people coming off welfare), because if the word gets out there that there is no job at the end of it, then it's just sort of a three- or four-year guillotine that you've set up. You're going to cut their heads off, because you're not going to have jobs at the end of (the cutoff period for public assistance).
FT: What steps need to be taken to preserve those entry-level jobs? Is it just a matter of good will by the business community? Do you envision some kind of tax incentive to hire those coming off welfare?
Chiles: We certainly need good will on the part of the business community to be successful. With our Department of Labor and Department of Children and Families, we're launching a partnership with our business community called WorkPay$. This provides some smart incentives and tax breaks for employers to hire people moving off welfare.
Taxes
Background: To fund Chiles' only major new initiative, the Tobacco, Education And Child Health (TEACH) program, the budget proposes a 10-cent-per-pack tax on cigarettes that would generate $94.4 million to be spent on children's programs aimed at fostering healthy lifestyles and providing mental health services, substance abuse treatment, and education about tobacco, drugs and alcohol. Also on some legislators' agenda is a possible repeal of the state's tax on intangible assets, which provides about $1 billion in revenue.
FT: Who would administer TEACH? Sounds like it could be the making of a new bureaucracy.
Chiles: We will do it through the Department of Education, the Department of Health and the Department of Children and Families. We would set up a trust fund and the tax would go into the trust fund. California increased their cigarette tax 25 or 35 cents a pack. They reduced the number of smokers by 40% when they got out there with a meaningful program, so we've got some patterns out there on how to do it. In California, about 15% of their people smoke; about 24% of ours smoke.
FT: The response to the proposed cigarette tax hasn't been too ...
Chiles: Hasn't been thundering, has it? It has, of course, run into the no-tax mantra. To me, family values should be anti-smoking, should be anti-tobacco. So, I think you just keep working on it.
FT: Could you support a repeal or phase-out of the intangibles tax?
Chiles: How are you going to replace the tax? If the question is, do I think the intangibles tax works against Florida in its (efforts) to bring wealth and business to Florida, yes, I do. But on the other hand, when we don't have a personal income tax, when we don't have an inheritance tax, we're an incredible tax haven for many people. How do you replace that money?
FT: You know, in past years you spent a lot of time on tax reform, with mixed results. How come you didn't go after a bigger piece of tax reform this year?
Chiles: I don't see any support for it at all. You know, it's a question of where you're going to break your pick.
When I was running for governor the first time, I made a mistake. I read the Cornerstone Report that was done by researchers hired by the Chamber of Commerce; and so I started talking about (tax reform). When I got elected, I went to the chamber and they said, "We will march with you." And I marched, and they retreated. And I got handed my head.
Since then, it's just a question of the right timing. This year, in a Republican-controlled House and Senate, it just didn't look very promising.
Higher Education
Background: Chiles proposes a 7.95% increase in tuition to generate $22 million for library resources, computer labs and related technology. His budget also provides $27.6 million in new funding to create space for more than 3,600 new full-time students.
FT: Is the budget ambitious enough given the demand by the business community to improve education? Would you compare the $94.4 million for TEACH with the much smaller increase for technology and library resources?
Chiles: That $94.4 million isn't there yet. I think if you ask the regents or even presidents, they would say that we've done pretty well by them. I did support their tuition increase. We wanted to make sure, and in our budget we did, that we did not add a burden on disadvantaged students by pricing them out of the market. We've had a rule of thumb that we would not charge parents and/or kids more than 25% of the cost of the college education. The 8% increase would (keep it) right at that level.
Environmental Protection
Background: This winter, a report by the Public Employees for Environmental Responsibility, a public interest group, found that more than 200 employees of the Department of Environmental Protection said that they had been ordered to break environmental laws, and that two-thirds said DEP Secretary Virginia Wetherell should be fired.
FT: What's your feeling about Secretary Wetherell at this point?
Chiles: I think that overall Ginger is doing a good job. We combined two agencies, and one was more of a land managing agency and the other had the parks and things like that. Two different cultures entirely.
We then said we're going in a very different direction, ecosystem management, as opposed to individual permitting. And the other thing that we said was that we are not going to rely as much on the game of "We're going to catch you, and if we catch you, we're going to fry you, or we're going to penalize you." We're going to look at what is the best way to get compliance. And I think that we've been fairly successful.
In fact, the interesting thing is that we've received national awards and national recognition for both ecosystem (management) and the change in the philosophy. But there are an awful lot of people in the environmental community who don't agree with what we've done ... haven't from the start.
I know we're doing a better job with the ecosystem management, but obviously we have a lot of work to do. Part of that is a training thing, and part of that is philosophy. We have not succeeded in conveying to (DEP employees) what we are about, why we've made this change.
Prisons
Background: Chiles' budget recommends more than $1.8 billion for prisons, an increase of $114 million in general revenue and $193 million in additional trust funds. The state's prison population is expected to rise to more than 67,300 by June 1997. Florida will need to provide more than 30,000 additional prison beds by 2002, according to Criminal Justice Estimating Conference projections, to ensure that inmates sentenced after December 1995 serve a minimum of 85% of their sentences, as required by Florida law.
FT: You finance more beds in your budget, in line with the 85% sentencing requirement. Is there no concern with problems of financing this policy?
Chiles: This is the third year we've proposed bonding for prisons. The first two, the Legislature would not go along, primarily because the Republican Senate was so opposed to it. I hope that won't happen this time. To me, when you bond for schools, colleges, parks, football stadiums and you're not going to bond for prisons (that have to) last you 30 to 50 years, it just doesn't make any sense at all.
Workers' Comp
FT: The reforms you pushed in 1993 solved many of the problems for employers in Florida's workers' compensation insurance market. Any more changes coming?
Chiles: When you make a major reform like we did, you have to have a little time to see how it's working. We're not proposing anything this year, but we think that it's something you probably need to do a more in-depth study on.
Healthcare
FT: The newest state agency, the Department of Health, came into being last year. Some see it as a creature of the healthcare community. Some business people worry that legislators will try to expand its powers, undermining existing healthcare cost controls.
Chiles: I don't think we should be putting additional powers and duties in there right now. I feel like we ought to get some experience with what we have.
FT: The Agency for Health Care Administration has announced plans to publish information about doctor discipline and lawsuits. That's controversial.
Chiles: We feel we have the power now to publish some of those things. The Legislature may resist us, but we think that's part of the public's right to know.
Politics
FT: Who are you going to support next year for governor?
Chiles: Oh, I'm a Buddy McKay man.
