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20 Fla. B. News 1 (1993)

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M]  The plan calls for removing the
sales tax exemption on legal fees
and several other services,
including lobbying and
accounting charges.



  For the second year in a row, Gov.
Lawton Chiles is proposing to tax legal
services as part of a broader budget pack-
age that raises state taxes and spending.
  Chiles labeled his 1993-94 fiscal pack-
age the Smart Dollar budget. It calls
for removing the sales tax exemption on
most legal fees and several other serv-
ices, including lobbying and accounting
charges.
  But it also would boost spending for
courts and related agencies, including
funding for 28 new judges.
  Bar President Alan Dimond praised
the increased money for courts, public de-
fenders, and state attorneys, but ex-
pressed reservations about taxing legal
fees.
  Having just received the details of the
sales tax proposal, I can advise the Bar
we are studying it carefully, he said. His-


torically, the Bar has opposed a sales tax
on professional services, and has suc-
cessfully done so for over 20 years. But
each year we review the policy with an
open mind:'
  The president invited Bar members to
send their views in writing to him at the
Bar headquarters at 650 Apalachee Park-
way, Tallahassee 32399-2300.
  Dimond said he was unhappy Chiles'
proposals didn't suggest lifting exemp-
tions on other major services, such as
advertising and broadcasting. And he
said taxing legal fees would hurt clients
and limit access to the justice system.

Tax Proposal Unexpected
  Frankly, with the unanticipated in-
crease in general state revenues, I'm a
little surprised to see this additional tax
proposal, he said. You would think with
an approximately $34 billion budget, it
would not be necessary to tax citizens
who exercise their constitutional rights
to seek justice in the court system:'
  On the spending side of the budget,
'We applaud the recognition that Gov.
Chiles has given to the needs of the jus-
tice system:' Dimond noted. Our state
attorneys and public defenders have been
underfunded for years and hopefully the
new budget will help them catch up:'
  Chiles released details of his proposed
               SEE BUDGET, PAGE 4


TrNews


and Continuing Education Guide


miOTA contributions tumble


0 Falling interest rates cut IOTA
contributions by more than $3
million last fiscal year and
probably by another $3.5 million
this year. But the Foundation says
it's too early to panic.



By Mark D. Killian
Associate Editor
   Due to collapsing interest rates, IOTA
 contributions to the Florida Bar Founda-
 tion fell by 17.5 percent in fiscal 1991-92
 and may drop another 25 percent in 1992-
 93.
   IOTA contributions for 1991-92 dipped
 to $16 million, down from a high above
 $19 million in 1990-91. According to the
 Foundation's treasurer's report, projected
 contributions for 1992-93 are $12.4 mil-
 lion, a dip of another $3.5 million.
   I don't want to scare people, but I
 think people need to understand that we
 are impacted by interest rates, as is eve-
 ryone:' said Jane Curran, the Founda-
 tion's executive director.
   The decline is due to dropping interest
 rates, Curran said, and not a decline in
 trust account activity. Every two weeks,
 the Foundation surveys the six to eight
 banks that represent 85 percent of Flor-
 ida lawyers' trust account activity and
 has concluded that the total principal in
 the accounts has remained relatively
 level over the year.
   The average return on trust accounts
 as of November was 1.83 percent, she
 said. In 1990-91, interest rates averaged
 between 4.5 and 5.5 percent.
   In response to the falloff, the Founda-
 tion is planning for future funding deci-
 sions based on a worst case scenario,
 even though the Foundation's financial
 advisors expect interest rates to begin to
 climb again by this summer.


The Future
   Curran has recommended the Foun-
dation's committees and board base long-
term plans on receiving $12 million per
year, which is roughly the contribution
level with an average interest 'rate of
three percent.
  I think the boards and committees,
especially legal aid, are considering what
would happen over the next two years if
we only took in $10.5 million:' Curran
said. Where would our funding priori-
ties be?
  Further projections will be available
in March and June to help guide the com-
mittees and board in actual funding deci-
sions.
  I don't want people to think that the
  Foundation, at this point in time, has to
  start retrenching:' Curran said. It's too
  early, and we have substantial reserves:'
  No one in the Foundation considers
  IOTA as a never-ending fountain:' Cur-
  ran said. That's why in 1990-91, when
  interest rates averaged about five per-
  cent, the Foundation began to build up
  substantial reserves.
  The reserves aren't going to last for-
  ever, and at current levels could only carry
  us a couple of years, she said.
  If revenue levels do not improve in
  1992-93 or 1993-94, the Foundation
  would incur a $1.5 million deficit if legal
  assistance to the poor providers were
  funded at current levels, Curran said.
  That figure includes an anticipated pro
  bono funding round to help start circuit
  programs in conjunction with the Su-
  preme Court's voluntary pro bono plan.
  That alone would cost $600,000 a year
  for two years, or about $30,000 annually
  per circuit,
  'We could do that for one year or not
  at all to pull down the deficit figure or
  trim back administration of justice
  grants, or reexamine other programs if
  need be, Curran said.
  The point is we have some flexibility:'
  Curran said.
  The Foundation also will study ways
  to maximize IOTA contributions indepen-
  dent of the interest rates, Curran said.


• Board to name Foundation
directors, page 2.

* Foundation applies for
Ford grant, page 5.

  Those options may include reducing de-
lays in transmittal of funds by financial
institutions, increasing the number of
Foundation depository institutions/short-
term funds investment managers, target-
ing large accounts for semi-monthly
remittances, working to reduce financial
institutions' service charges by stream-
lining operations, and increasing IOTA
participation.
  If interest rates do not rise, Curran
said, the real crunch will come in the
1994-95 grant year.'


January 1, 1993 e Vol. 20, No. 1


Year In Review
IT'S BEEN quite a year for The Flor-
ida Bar. Turn to pages 11-13 for a
review of the top events and people
that made a difference in 1992 - a
year that saw everything from the Su-
preme Court chief justice's merit
retention battle to anti-bias rules to Hur-
ricane Andrew.

JQC Chair
                  FORMER BAR
                  President Joe Re-
                  iter takes the helm
                  as chair of the
                  state's Judicial
                  QualificationsCom-
                  mission, just as the
                  Bench/Bar Com-
                  mission is due to
                  recommend
                  changes in how
                  the JOC conducts
                  its business.
                         PAGE 8

 Certification Rules
 A NEW promotional campaign puts
 the Bar's certification plan in the spot-
 light, and a new wave of certification
 seems to be on horizon.
                       PAGE 14

 Media Law

 LOOK INSIDE the back section of
 this issue for a special section on the
 Media Law Conference, set for Janu-
 ary 27 in Miami.


 CLE Inside

 IN THIS NEWS are brochures for
 CLE courses on commercial practice
 for the tax lawyer, evidence, employ-
 ment litigation, and a press release
 from CLE publications.
 Out-of-state members may obtain cop-
 ies of the brochures by calling CLE
 registrations at (800)874-0005.


LONGTIME SUPREME COURT employee Robert Scott, right, hugs his brother Eugene
while U.S. 11th Circuit Court of Appeals Judge and former Florida Supreme Court Just'ce
Joseph Hatchett looks on during Scott's retirement ceremonies. Scott has been an assistant
clerk at the court for 42 years, including helping the justices robe before court appearances.
See story, page 9.


Chiles proposes tax


Olm legal services

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