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Governor backs off a bit

By Steve Bousquet, Tallahassee bureau chief
In print: Wednesday, November 26, 2008

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TALLAHASSEE — A day after expressing his willingness to impose a short-term foreclosure moratorium and consider a 50-cent increase in the cigarette tax to boost Florida's faltering economy, Gov. Charlie Crist showed restraint on both ideas Tuesday as each drew resistance from industries.

After meeting with a banking industry lobbyist, Crist said "my preference" on stemming foreclosures is voluntary industry cooperation rather than an official declaration, such as an executive order that could face legal challenges. He plans to make a formal announcement next week.

"These are challenging times, and people need help," Crist said.

Crist said he might limit the freeze to people in homesteaded properties, not owners of second or vacation homes, whom he described as "people who are speculating and have several Lexuses in the driveway."

Alex Sanchez, president of the Florida Bankers Association, urged homeowners who have defaulted to contact their banks and work out payment plans. The industry resists formal government action.

"Our banks are willing to work with every Floridian who lives in their primary residence who has a need and obviously no mortgage fraud was involved," he told the Capitol News Service after meeting with Crist. "That's been a long-standing policy."

Sanchez used the "two Lexuses in the driveway" analogy that Crist repeated almost word for word.

On the subject of cigarettes, the tobacco industry signaled it would strongly resist an effort to increase the excise tax, now at 34 cents a pack, one of the lowest rates in the nation.

"I'm not warm and fuzzy about that," Crist said of a higher cigarette tax, which on Monday he appeared open to, saying, "I don't want to be dogmatic on anything." Crist stopped short of outright opposition and said the size of the deficit demands that all options be considered.

Some Republicans said they are willing to vote for a 50-cent cigarette tax hike.

"I'd probably be okay with that, personally," said state Sen. Dennis Jones, R-Treasure Island, who said smokers' illnesses drive up Florida's Medicaid health care costs. "I am not for continuing to cut the budget. We need more revenue."

Jones also has backed other new revenue sources, such as video lottery terminals at pari-mutuel sites and an extension of the sales tax to Internet sales.

A bill to raise the cigarette tax (HB 11) has been filed for the next session and is co-sponsored by Rep. Rick Kriseman, D-St. Petersburg.

A spokesman for one of the largest tobacco makers said cigarette taxes fall heavier on low- and moderate-income people and that as the number of smokers declines, it's a "declining and unstable" revenue source. The industry has a ready-made list of talking points for opponents to use in arguing against higher taxes on cigarettes.

"In tough economic times, this tax or user fee falls on real people, real working Floridians," said Frank Lester of Reynolds American, corporate parent of R.J. Reynolds, which sells the Camel, Doral, Winston and Kool brands and has about 26 percent of the Florida market.

Lester said tobacco sales also help Florida's small retail stores make a profit.

Rick McAllister of the Florida Retail Federation voiced concern that Florida might raise the tax on a product "so easily accessible" elsewhere, such as on Indian reservations or across state lines in Georgia and Alabama.

Steve Bousquet can be reached at bousquet@sptimes.com or (850) 224-7263.