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Fix State Budget With Smart Taxes, Keen Ax

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The Tampa Tribune

Published: November 26, 2008

Much has changed since Florida lawmakers adjourned nearly six months ago.
Revenue targets have been harder to hit than a Scott Kazmir slider that fools the batter as it sinks away.

Economists have been surprised by the rapid fall in home sales, car sales, retail sales and tourist visits in recent months. Florida is $1.4 billion short of previous estimates, which themselves had been adjusted downward.

With the state economy in recession, it's clearly a whole new ballgame from last spring, when the Legislature thought its biggest challenge was how to cut property taxes.

The state's chief financial officer, Alex Sink, is right to call for a special session no later than early January. Some lawmakers are saying that it's pointless to meet before they've agreed on what to do. Their duty is to get together and figure it out.

Two things are obvious. The state needs more sources of revenue and it needs to sharply reduce spending.

Gov. Charlie Crist is calling for a 4 percent cut in all state agencies, and that's a good starting point. But all agencies are not equally important. Hard financial times demand that priorities be set with care.

For example, cutting aid to families caring for the disabled at home might force more people into nursing homes at greater cost to the state. Cutting law enforcement, courts, and juvenile programs could lead to crime increases that cost taxpayers more in the long run.

Spending down reserves is also risky, but increasingly necessary. The current financial storm qualifies as more than a rainy day. It has become a rainy year.

Some additional sources of revenue are also needed. Crist is correct to think about adding 50 cents to the state tax on a pack of cigarettes. And with gasoline having fallen in price by more than $2 a gallon this year, it's a good time to think about adding a few cents to the state gasoline tax.

Another reasonable source of money would be to join other states that are trying to find a way to collect sales taxes on goods bought by mail order or on the Internet. Florida has resisted joining the effort to streamline and simplify collections. Once the states agree how to do it, Congress is likely to pass enabling legislation.

Until that happens, out-of-state competitors will have a tax advantage over Florida retailers.

The Legislature also should endorse Crist's gambling deal with the Seminoles. Rejecting it won't stop gambling but could cut the state out of a share of the take.

The Legislature must also swing the budget ax, but not wildly. Small, well-aimed strokes will better serve taxpayers.

Some layoffs at every level of government appear inevitable. A national survey shows that more than half of the public-sector employers in the country are in hiring freezes and 25 percent are planning layoffs next year.

How much public service in Florida is affected depends on how wisely the cuts are made.

As the pioneering French pilot and author Antoine de Saint-Exupery once said, "A designer knows he has achieved perfection not when there is nothing left to add, but when there is nothing left to take away."

There is much that can still be taken away from state and local governments. Among many things that could be trimmed are the legislator's own perks. They get free health insurance for themselves and their families, while most workers in the public and private sectors have to pay extra for family coverage.

Lawmakers should reform the so-called "drop plan" that allows long-time public workers to collect both a pension and paycheck. It's bad for morale to lay off some workers while giving others a windfall. The state's policy should be to give public employees competitive pay and benefits, not the best deal available.

Unlike the federal government, Florida has to balance its budget. Financial circumstances are changing so fast that the longer the Legislature waits to start making hard decisions, the harder those decisions will be.

The state should hope for a Christmas rebound but plan in early January to face reality and deal with it.

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