PRESS RELEASE May 30, 2001

ESTATE TAX CHANGES STRIKE BLOW TO FLORIDA BUDGET
Phase Out of Tax Presents Formidable Challenge

TALLAHASSEE -- Florida lawmakers must find ways to fill a huge hole in the state budget starting in 2003. The federal tax cuts signed into law by President Bush add up to a $174.3 million dollar shortfall for the Sunshine state, according to a Florida TaxWatch briefing issued today.

The new law phases out the federal estate tax faster than the President's original proposal, but slower than the Senate version that would have had a $460 million first-year impact on Florida.

"Certainly the final version is an improvement over the Senate plan, but the hit on Florida is still formidable," said Dr. Keith Baker, Senior Vice President and Chief Operating Officer for Florida TaxWatch. "Even without the accelerated phase-out of the estate tax, Florida's state budget could be hard-pressed if recent declining revenue growth continues."

The TaxWatch briefing recommends state leaders take action now to meet the challenge of shrinking budget resources. Among the TaxWatch recommendations:

Step up the turkey patrol - cut out all member projects that have not proven themselves in the budgetary process.
Seek out and implement cost savings and productivity improvements
Promote and initiate meaningfulcompetition in the delivery of state services