PRESS RELEASE May 18, 2001

ACCELERATED ESTATE TAX CHANGES POSE THREAT
First Year Impact $460 Million Additional on Florida

TALLAHASSEE Florida TaxWatch today warned of a serious fiscal threat for Florida lurking in a proposal from the U.S. Senate Finance and Tax Committee. The proposal to accelerate the elimination of Federal estate tax credits to state governments would leave a big hole in the Florida budget starting in 2003.

"For 75 years there has been a shared and fair partnership between the federal government and state governments in Federal estate taxation and tax credits," said Dominic M. Calabro, President of Florida TaxWatch. "The committee's proposal would force states to bear a disproportionate and draconian share of the burden for elimination of this tax."

Florida U.S. Senator Bob Graham has filed an amendment to block the plan to accelerate elimination of the estate tax credit and bring the Senate proposal back in line with the plan proposed by President George W. Bush and passedby the U.S House.

"The President's plan is a proportional plan to eliminate the estate tax and the tax credits to states, " Calabro said. "Florida TaxWatch is not taking a position for or against elimination of the Federal estate tax. We do believe it is important that the burden is proportionately shared, and fairly implemented."

According to TaxWatch, the Senate plan would mean a $460 million additional hit for Florida in the first year of implementation in 2003. That number would be up to $1.175 billion dollars by 2006. In comparison, the plan passed by the House would have a $5 million dollar impact on Florida in 2003, and would spread the elimination process out until 2011. A year-by-year analysis of the impact on Florida is attached.

Florida TaxWatch is a non-partisan, non-profit research institution supported by homeowners, small businesses, corporations, labor unions, individuals and philanthropic foundations. The organization is dedicated to improving taxpayer value, government accountability and citizen understanding and participation in their state and local government fiscal policies.