Observations and musings on Jacksonville Politics

Legislature Faces Tougher Choices

We’ve had two Friday the 13ths in the past 4 weeks.  And if you didn’t suffer from triskaidekaphobia before, this past Friday’s budget projections will probably make you wary the next time Friday the 13th rolls around.

According to the St. Pete Times, in their announcements about the state of Florida’s economy,

state economists were using words like  “deteriorating” or in a “downturn” or “negative” when they held their meeting Friday to assess tax revenues that fill the state’s general-revenue fund, which accounts for schools, health care, prisons and courts.

The 2009-10 budget year, which begins July 1, will mark the fourth year in a row that tax collections have declined. Next year, the state’s general-revenue fund might take in $19.9 billion. That’s about the same as the 2002-03 level.

Amy Baker, coordinator of the Legislature’s Office of Economic and Demographic Research, said Florida’s economy won’t improve much until 2011. Then, the credit market should improve and a big chunk of baby boomers will hit retirement age and move to Florida along with their money.

By the end of their meeting, the economists agreed that their November tax collection estimate for the current year was off by $1.1 billion. Next year, it’s off by $2.4 billion. 

This year’s budget hole can be completely closed with stimulus money. Senate budget chief J.D. Alexander estimates next year’s deficit will stand at roughly $3 billion once the federal stimulus money is plugged in. And that doesn’t take into account a projected $1 billion drop in school property tax collections due to sinking property values.

That all but guarantees that school spending next year will be flat if legislators don’t raise tax rates.

The economists said Floridians are spending less, saving more of what little they have and losing jobs and homes at an ever-increasing rate. Tourists are staying away, and population growth is flat. That means lower-than-expected tax collections from sales, corporations and real-estate transactions.

“It’s almost like the economy’s gone off the cliff, and it keeps falling,” said Tim Campbell, an economic analyst. “We’re expecting job losses for a considerable time yet in our economy.”

Sen. Carey Baker, a Eustis Republican, said he is opposed to passing a “broad-based” tax increase that could help the budget but hamper the economy. “If I’m going to raise taxes, someone threw out taxing porn. I could do that. Taxing gambling, I’d support that if I had to,” Baker said.

Sen. Mike Haridopolos, a Melbourne Republican, said he could support an increase in slot machine gaming that could be taxed. But that’s a long shot, say some House Republicans. The House has resisted the governor’s taxable gambling deal with the Seminole Tribe of Florida.

Lawmakers in both chambers say they’re concerned that the “strings attached” to the stimulus money essentially prohibit them from cutting health care and education. That’s nearly 80 percent of the general revenue budget. The rest — public safety, courts and roads — will be politically tough to cut.

Crist already proposed raising some fees, but senators last week demanded to know what additional tax and fee increases he would accept. Crist ducked the question.

“Oh,” he said last week, “I’ll give a clearer direction at the appropriate time.”


Filed under: Florida, Florida Legislature, Florida Politics, , ,

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