Florida governor presses tax cuts despite budget gap

TALLAHASSEE Tue Mar 8, 2011 11:15pm EST

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TALLAHASSEE (Reuters) - Florida Governor Rick Scott on Tuesday told increasingly skeptical lawmakers that the state's corporate and property taxes had to be slashed despite a gaping $3.6 billion budget hole.

On a day that saw protests from unions resisting cutbacks and anti-government Tea Partiers that back him, the Republican Scott, in a speech to the Republican-dominated state legislature, stuck to a script that last year took him from obscurity to the governor's mansion in eight months.

Scott said he wanted to create jobs in a state with a 12 percent jobless rate by reducing regulations, lowering corporate income and property taxes, and squeezing efficiencies from agencies that run the nation's fourth-largest state.

Earlier Tuesday, Senate President Mike Haridopolos, a Republican, told other senators that providing corporate income tax breaks and reducing property taxes may be too tall an order given Florida's other pressing needs.

"Whether we can actually reduce taxes, at the present time, in a responsible way, remains to be seen," Haridopolos said. "If anyone can show me how we can realistically feed the increasing multitude with even fewer fish and less bread than we have now, then I will gladly follow him."

Teachers and other government workers that would be hurt by some of Scott's proposals protested outside Florida's legislature before the governor spoke. Across the street, Tea Party activists and supporters of Scott gathered.

In Orlando, hundreds met outside a union office and marched to a rally against state budget-cut proposals seen as some of the most severe in America. States are bringing in at least $100 billion less than they will need to cover costs in fiscal 2012, which for most starts in July.

Scott, who last year defeated a prominent Republican in a primary before defeating a Democrat in a $70 million campaign he largely funded himself, last month proposed budget cuts of $5 billion and tax reductions of $4 billion over two years.

The legislature gathering on Tuesday will have the final say on a spending plan for the fiscal year beginning July 1. The current budget totals about $70 billion.

Included in Scott's proposals are calls to expand managed care, eliminate early retirement benefits for state workers and cap the amount the state spends on employee health insurance.

Scott's agenda has rankled unions, teachers and state employees, many of whom have not had pay raises in several years and fear potentially higher healthcare costs, cuts in education and the possible elimination of their jobs.

"The first step to better times is acknowledging that government cannot afford what some have come to expect." Scott said. "Doing what must be done will not make me 'Most Popular,' but I'm determined to make Florida 'Most Likely to Succeed.'"

(Writing and additional reporting by Michael Connor in Miami; additional reporting by Barbara Liston in Orlando; Editing by Gary Hill)

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