Tuesday, April 12, 2011

State budget woes ... and what we can do about them

Florida's Legislature is just over half-way through its 2011 session.  The biggest challenge is plugging a $4 billion budget gap.   

Needless to say, it's looking grim.  Spending cuts are inevitable.  And if the Governor has his way, the cuts will be larger than what the Legislature is recommending, to pay for additional corporate tax cuts.

The League of Women Voters of Florida's lobbyist Ben Wilcox summarized key facts about the House and Senate proposals this way:
The House proposal would spend $66.5 billion and reduce the state workforce by 5,245 jobs compared to the more modest 1,578 jobs that would be eliminated by the Senate plan [which would spend $3.2 billion more]. ...

Both budgets make deep cuts in health and human services programs, but the Senate budget would eliminate funding for drug and hospital expenses in the state’s Medically Needy program. That program serves people who don’t qualify for Medicaid, but have debilitating medical conditions. The House budget would preserve the program. The Senate also makes deeper cuts than the House in hospital Medicaid rates, cutting them by 10% rather than the 7% cut proposed by the House.

Remember that Florida is the lead state in a major case challenging the constitutionality of the Affordable Care Act.  Health care for the needy isn't a high priority here.

A friend shared Estus Whitfield's op ed from today's St. Petersburg Times called "Florida at a crossroads."  Whitfield worked in state government from 1971 to 1999 and was the principal environmental adviser to Govs. Bob Graham (Democrat), Bob Martinez (Republican), Lawton Chiles (Democrat) and Jeb Bush (Republican).  Whitfield wrote:
Gov. Rick Scott's response [to the budget shortfall] is to cut education, cut environmental protection, cut transportation, cut aide to the needy, fire thousands of state employees and reduce take-home pay for the rest. He also proposes to cut corporate and property taxes by $2.4 billion (seriously). Scott speaks of his proposal as simple and necessary. Maybe it is, unless you have children or grandchildren whom you wish to succeed in life, or enjoy Florida's magnificent environment and quality of life, appreciate good transportation, or just need public services to struggle along. ...
[Consider] the perspective of the businesses that the governor wants to lure to Florida with his draconian reductions in education, environmental protection, transportation, safety, and so on.
It is a fact that businesses looking to relocate give close attention to the quality of education, environment, safety and general quality of life of the places they are considering. If you owned a business, would you move to a state that has poor schools, declining public safety and a gloomy environmental future - a state going backwards?

Whitfield - a government insider - expressed his frustration with the inequities in Florida's sale tax system:
Most of us pay sales taxes on almost everything our family needs, except, justifiably, food and drugs and other essentials. But, check a little closer and you may be surprised to find that if you can afford to buy a stadium skybox or a yacht, you pay no taxes. Look again and you will see hundreds of tax exemptions that were pushed through by an army of lobbyists who represent the wealthiest in the state and nation.
Most people don't complain about paying taxes for the benefits they receive. But if the Legislature or maybe the tea party would ask, "Is everyone paying their fair share?" the answer would be no. Unlike ordinary citizens who pay their sales taxes without complaint, many rich folks are doing far better than us; they pay no sales taxes on hundreds of big-ticket luxury and business items.
Should the Legislature ever get serious and eliminate or reduce a fraction of the hundreds of unjustifiable tax exemptions on goods and services, the $3.8 billion budget problem would be solved with no pain - there would be no need to cut education, transportation, public health and safety, environment, and punish public employees. Unless the sales and services tax exemptions are altered so that more people and businesses pay their fair share, this state will have a budget crisis every time the economy hits a bump in the road.

The unbelievable sales tax system with exemptions for things like skyboxes and yachts has been an issue the Florida LWV has been speaking out about for years, to no avail.  In an opinion piece in the Orlando Sentinel in April 2009, LWVF President Deirdre Macnab wrote:
Ranking 47th among the 50 states in lowest overall tax burden, according to the Tax Foundation, Florida depends on its sales tax for roughly 75 percent of its state revenue.
Yet because of the relentless work of high-paid lobbyists over the years, Florida now gives away more than it collects in sales tax -- thus increasing the burden on individuals and small businesses. From ostrich feed to lap dancing to bottled water from the depths of our springs, there are hundreds of exemptions, all of which have been protected in prior legislative sessions. This includes almost $400 million for large multistate corporations like Walmart.
Does Florida's economic crisis finally provide an opportunity for long-overdue tax reform?
The League of Women Voters of Florida strongly believes that sufficient taxes must be levied to meet the state's long-term needs for education and other services. The league has advocated for such reform for almost 20 years. There are many measures that can be taken to raise additional revenue within existing state constitutional constraints, which do not constitute raising taxes, but rather leveling the playing field.
Some of these measures include the following actions:
  • Review and remove sales-tax exemptions that do not fulfill a public purpose.
  • Compel Internet sellers with subsidiaries or representatives in the state to begin charging Florida sales tax.
  • Implement combined reporting to prevent corporations from artificially shifting profits earned in Florida to subsidiaries in other states (and raising the tax burden for local companies).
  • Remove the exemption of limited-liability companies and subchapter S corporations from the corporate income tax.
  • Reinstitute the intangible tax.
  • Close the loophole on the documentary stamp tax.

The League of Women Voters of Florida urges citizens to tell their state legislators that our children deserve a state where the schools and universities have the funding needed to give them the future they deserve.

Let your representative know you support closing the loopholes and exemptions that riddle our state tax code, and that you support bills to prevent corporations from artificially shifting profits earned in Florida to subsidiaries in other states. The message must come from the citizens.

That advice from two years ago is still good advice today.  You can easily find your representative and send him/her an email from the LWV's website.  Just click here.

A waste of time, you wonder?  If the League of Women Voters has been at this for 20+ years, will a call or email from me make a difference?  Here's what Whitfield had to say:
Someone said to me, "Why are you writing this? Don't you know that you are spitting in the wind, facing a stacked deck?" Yes, but we have to keep trying. You see, I was born here, raised my family here, and spent my life and career caring about my state. Now we worry that our four young grandsons may not get a high-quality education, clean air to breathe and water to drink, and a safe and healthy environment. We can't quit yet.

No, we can't quit yet.  Please take a minute and send an email to Governor Scott, and your Florida House and Senate representatives.

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