April 16, 2002
On March 9, 2002 , President George W. Bush signed into law the Job Creation and Worker Assistance Act of 2002 or what has commonly been referred to as the “economic stimulus package.” This federal legislation is intended to act as a stimulus to the U. S. economy by encouraging increased capital spending, investment, and the creation of new jobs. Such a broad relief act can only originate at the federal level and, in part, its full benefits to the business community can only be realized in each state by and through the acquiescence of their respective state governments.
A number of states have already decided that they do not intend to “piggy back” the federal code provided in the economic stimulus package. This is a shortsighted decision on the part of these states, depriving their resident corporations of the benefits of this federal act.
Unfortunately, The Florida Senate is sharing the shortsighted, anti-business sentiments of these states. However, the Senate’s desire to not piggy back the federal economic stimulus act has hit a snag. The Senate actually passed a bill during the Regular Session doing just that, on February 27, providing that state law would piggy back the federal code. The House gave the same bill approval on March 14. The bill is now on its way to the Governor for his signature.
Forgetting the economic benefits of the stimulus package, the Senate claims that the bill they passed will “cost” Florida $272 million in tax dollars for the 2002-03 fiscal year. The Senate leadership further claims that the bill they approved in late February did not intend to, nor should it apply to, piggy backing the federal tax code signed into law on March 9. This is a somewhat disingenuous claim, given that the economic stimulus package received nearly suffocating coverage in the national press for weeks and months prior to its adoption.
Governor Jeb Bush and House Speaker Tom Feeney (R-Oviedo) wish to embrace the federal tax code relief package. Hence, there is a breakdown between the Senate, the Governor and the House over this issue. What gives the Senate remaining leverage on this issue, despite the fact that they already passed the bill, is that the state budget remains unresolved. The Senate wishes to budget or spend the $272 million in question in this year’s budget, which presumes that the Governor would actually agree to veto the federal piggy back legislation. Theoretically, the Legislature and Governor have until July 1, 2002 to adopt the new state budget. However, it is very likely that for reasons both practical and political, there will be enormous pressure to get the budget done soon.
Governor Bush has asked AIF to assist him in communicating to The Florida Senate just how critical this federal piggy back legislation is to the Florida business community.
We are requesting that AIF members supply us with financial impact/benefit statements that would illuminate in real dollars to select senators what it would mean to individual Florida companies if this package were to fail final adoption. There are two issues under this requested impact statement. In addition to (1) the lost tax benefits, there would be (2) the burden of keeping two separate “sets of books” for the differing state and federal tax codes as a result of the de-coupling advocated by the Senate. Please supply this information with your company name. If, for some reasons, you cannot supply the identity of your company with the requested impact statement, please proceed with supplying the documents without your corporate identity. We will hold the correspondence confidential at your request.
In addition, we strongly encourage you to contact your state senator individually, communicating your strongest support for Florida adopting the provisions of the federal economic stimulus package bill. With the media typically hostile to all things business, it would be unfair for the business community to leave the Governor and the House Speaker out there on their own without any support from us. The Senate needs to feel your support in no uncertain terms (see attached phone, fax and e-mail sheet).
Both the financial impact statements and your contacting of your respective state senator needs to be done as soon as possible.