House and Senate leaders agreed Friday to a budget outline that severely curtailed both of Gov. Rick Scott's priorities for the coming year, slashing Scott's tax cut plan and wiping out a business-incentives package.
The deal on "allocations" — legislative shorthand for how much money will be directed to each area of the budget — clears the way for lawmakers to begin negotiations on the details of a spending plan for the fiscal year that begins July 1. Those discussions have to wrap up by March 8 for the Legislature to finish the annual session on time.
The talks on allocations had largely centered on Scott's call for a $1 billion tax-cut package and a "Florida Enterprise Fund" of $250 million in business incentives. The House had spread out $1 billion in tax cuts over a longer timeframe while zeroing out the incentive package. Senate leaders had countered with $250 million for the incentives and a potential $250 million in tax cuts.
In the end, lawmakers agreed to $400 million in tax cuts in the current year and no money for the Florida Enterprise Fund.
Scott's office blasted lawmakers late Friday for the decision on the incentives package.
"With the Legislature's action today, there will no longer be incentive funding for major projects to come to Florida ... and we are beginning the process of notifying cities across the state that there would be no funding available to help them recruit businesses if the Legislature does not take immediate action to reverse course," Scott spokeswoman Jackie Schutz said.
Zeroing out the Florida Enterprise Fund came as a surprise after the Senate's initial willingness to go along with the full request. In a statement issued Friday night, even House Speaker Steve Crisafulli said the House had expected to compromise.
"The Senate's decision to meet the House on economic development funding was unexpected, but will undoubtedly be welcomed by the majority of members of the Legislature," Crisafulli, R-Merritt Island, said. "While I firmly believe that all members of the Legislature want to see our economy grow and increase jobs in Florida, there is great bipartisan disagreement over whether our current economic incentives are the best way to achieve those goals."
Speaking to reporters Friday, Senate Appropriations Chairman Tom Lee, R-Brandon, said the decision was the product of the need to reach an agreement on the budget.
"We're working against a clock," Lee said. "We've been up here a long time over the last 12 months, and the House and the Senate both have priorities. We have a timeframe we're working within. We have a long-range financial outlook we're trying to adhere to."
Sen. Jack Latvala, a Clearwater Republican who spearheaded the push for the governor's incentives package, would not answer questions from reporters who ran into him at the Capitol. He walked away from the reporters and said he was looking for someone from his local newspaper.
The tax-cut number also means that Scott will fall short of his promise during his 2014 re-election campaign to secure $1 billion in tax cuts over the first two years of his new term. Lawmakers agreed to cut $372.4 million in the current financial year, which ends June 30.
Lawmakers pointed out that, after Scott proposed his spending and tax-cut plan, state economists slashed nearly $400 million from estimates of how much revenue the Legislature would have to work with.
"The fact that we got as close as we did to his campaign promise, given the reality of the shortfall, is amazing, I think," House Appropriations Chairman Richard Corcoran, R-Land O' Lakes, said.
Lee also underscored the changing estimates.
"Those promises were made a long time ago," Lee said. "The facts on the ground have changed. Leaders have to be willing to shift as the facts on the ground change."
The defeats for Scott raise the possibility that the governor, who has used his line-item veto pen to slash hundreds of millions of dollars in lawmakers' projects in the past, could retaliate after the spending plan is approved. But Corcoran shrugged off the possibility.
"He's used the veto pen strongly in the past," Corcoran said. "He could in all likelihood use it again."