Million-dollar credit card fee study looms as potential juicy target for DeSantis line-item veto

by | May 16, 2024

DeSantis has yet to announce any line-item vetoes, but insiders say there are a large number of potential targets.

With line-item veto authority vested in Florida’s Executive Office of the Governor and a July 1 budget deadline just six weeks away, DeSantis policy staffers are busily combing through the legislature’s jointly-passed $117.5 billion state budget, looking for anything that doesn’t fit the governor’s fiscal policy agenda. One potentially juicy target: a credit card interchange fee “study” that comes with the hefty price tag of $1 million.

This budget allocation, found under “Legislative Support Services,” aims to explore the complex issue of interchange fees, which impact both merchants and credit card companies. Interchange fees are the charges paid by merchants to credit card companies for processing transactions. These fees are collected by credit card companies and are used to fuel consumer loyalty programs and fraud protection services. But merchants argue that the fees are an undue burden on their businesses and that the credit card companies end up pocketing most of the cash. Both sides have waged a lobbying war in Tallahassee the last few years trying to swing the regulatory pendulum one way or the other.

Lawmakers, trying to avoid lobbying whiplash, apparently have thrown their hands up and decided that rather than study the issue for themselves, they’d prefer someone else do it and tell them what to think. That’s why the Florida House and Senate agreed to spend $1 million on the study, with the stated purpose being to gain a comprehensive understanding of both sides.

But Dr. Robert McClure, president and CEO of The James Madison Institute, says the whole thing is a colossal waste of taxpayer dollars. McClure isn’t pulling any punches, pointing out the lack of public debate regarding the money to be spent on the study. He also takes issue with the fact that the line item was incorporated into the budget without any transparency.

“There is now a secret study buried within the ‘Legislative Support Services’ section of the budget,” McClure wrote recently, noting that such secrecy contrasts with Florida’s tradition of government transparency.

The budget language specifies that the $1 million allocation will fund the study by the Legislature’s Office of Economic and Demographic Research through a contract with a public or private institution of higher learning. But the lack of public discussion or a competitive procurement process raises serious doubts about the value of the study.

“These kinds of budget items only serve to give the appearance of a rigged system picking winners and losers, absent any public debate,” McClure wrote.

With the state budget still not signed by DeSantis, McClure suggested that Governor DeSantis would be justified in vetoing the Legislative Support Services section to eliminate the study. This action would align with maintaining the state’s reputation for transparency and low regulatory burden.


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