Failure To Provide Real Tax Reform Puts Florida's Future At Risk

Gov. Charlie Crist wants to tap Florida's savings accounts to pay today's bills - a short-term fix that fails to address the significant revenue challenges facing this state.

OK, governor, pay the bills from the "rainy day" fund, if you must. Because as businesses have said for almost two years, when it comes to the economy, it's raining.

But heed the warning from Florida House minority leader Dan Gelber, who wrote in his blog, "It's sort of like using your savings accounts to make your mortgage payments, and crossing your fingers that some distant aunt leaves you an unexpected inheritance. Optimism is not an economic policy."

A severe economic downturn has left state government with a $1.47 billion shortfall. To keep the lights on, Crist wants to take $672 million from the Budget Stabilization Fund, or half of its balance. The governor is waiting until November - after the election and an updated revenue estimate - to decide whether to also pull $1 billion from the Lawton Chiles Endowment, which invests tobacco-settlement money for children's health programs.

Meanwhile, Crist has asked state agencies to hold back 4 percent of their spending to save another $800 million. But it's past time to ask every state agency to assume an equal share of budget cuts. All programs and services are not created equally and tough choices must be made. Rather than cut the courts or services for society's most-fragile citizens, good but nonessential programs - along with luxury benefits for executives in state government - should be trimmed or eliminated.

Political consultants say now is not the time for Crist to convene a special session to cut the state's budget, with the election just two short months off.

Maybe so, but the morning of Nov. 5, the governor should call lawmakers to Tallahassee - equipped with scalpels, not axes or broad brushes - to craft a budget that ensures government lives within its means.

Spending the reserves will get us past the election, but not past the problem.

Strategic thinking is needed because Florida is facing more than a severe cyclical downturn in its economy. Economists say the economy has undergone a fundamental shift that will leave it changed forever. With the digital revolution creating easy access to goods and services across the globe, business models are changing for local retailers, auto dealers, even newspapers.

Now consider this dark cloud: 70 percent of Florida's general revenue comes from the tax on retail sales. But with people increasingly doing their shopping online, Florida refuses to tax Internet sales. The pledge of "no new taxes" has created a significant inequity for brick-and-mortar businesses that pay local property taxes and employ local residents.

Florida could have leveled the playing field this year, if the state Budget and Taxation Commission had done its job. But the commission, which is appointed every 20 years to make tough choices outside the political realm, focused instead on ideological issues like vouchers for private schools. This week the Florida Supreme Court struck down its major recommendations, which means citizens will have to wait another 20 years for a chance at real reform.

Florida needs a plan to ensure its long-term economic health. Voters want it. In fact, they demanded it two years ago with a constitutional amendment that requires long-term financial planning.

Still, Crist and state lawmakers give the impression they have no plan. Theirs is a short-term, session-by-session focus.

At least one leader is looking ahead. Alex Sink, the chief financial officer, says Florida must come to grips with the budgetary challenges it will face in the next few years. She has called for a special session after the election to cut spending or raise additional revenues.

"I'm counting on House and Senate leadership to recognize that this situation requires an approach that spans the budget horizon of this decade," she said.

If he hopes to remove his thumb from the dike, Gov. Crist should take the lead.