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Florida's economic failings land it on worst 10 list

Congratulations, Florida.

Our economic misery and political fumbling have combined to grant us membership in an elite club. Florida is one of nine states whose fiscal weakness are deemed worthy of comparison with California's budget crisis.

As role models go, California's the only state to so readily issue its own funny money IOUs as a new form of currency.

Whenever I read about California's massive budget deficits and political stalemates, I am (at the risk of dating myself, again) reminded of the old Popeye comic strip. One of Popeye's buddies, a portly fellow named Wimpy, always tries to mooch a free meal with this line:

"I'll gladly pay you Tuesday for a hamburger today."

California embraced the School of Wimpy fiscal discipline. And a new report out Wednesday from the Pew Center on the States finds Florida and eight other states are wrestling with many of the same economic and political pressures wreaking havoc in the Golden (or should it now be Fool's Gold?) State.

First, some perspective. The Pew report tags Florida among the greatest-sinner states for fiscal weakness. It's true, this state has serious problems trying to balance a budget whose revenues are based so narrowly on sales taxes aimed at tourists and a corporate income tax.

But compared to some other states deemed troubled in the Pew report, Florida looks almost prosperous.

One point of publicizing these 10 states, says Pew Center managing director Susan Urahn, is to emphasize their combined impact on the country as a whole. Together, these 10 account for more than one third of America's population and economic output. The actions taken by their state governments, be it tax increases, severe spending cuts or sleight-of-hand borrowing, will slow down the country's recovery from this nasty recession.

"Some people say we have turned the corner on the national economy, but states will struggle for the next couple of years," Urahn says.

Pew looked at six criteria in picking nine states most like California: loss of state revenue; relative size of their budget gaps; joblessness; high foreclosure rates; legal obstacles to balanced budgets (such as a super-majority required for tax increases); and poor money-management practices.

Well, Florida's a leader of the pack when it comes to housing foreclosures, high unemployment and, in some cases, lousy money-management practices. But its conservative, balanced budgeting process at the state level should save us from issuing IOUs.

Urahn says Florida is challenged in raising revenue because it lacks a personal income tax (good for low-tax-lovin' residents but bad for budget deficits). And those tax revenues dependent on economic growth and tourism have stalled. Given that the state already spends paltry amounts on education and social services, deeper spending cuts are difficult, she says.

Will this be our eventual choice? We can charge $50 for a pack of cigarettes or learn to say, "I'll gladly pay you next year for a balanced budget today."

Robert Trigaux can be reached at trigaux@sptimes.com.

Florida: At the top of the bottom

Among 10 states deemed in greatest fiscal peril, Florida almost shines.

State Pew performance grade*

Florida B-

Arizona C+

Michigan C+

Nevada C+

Oregon C+

Wisconsin C+

New Jersey C-

Illinois C-

Rhode Island D+

California D+

* Grade based on how well states manage their finances.

Source: Beyond California: States in Fiscal Peril, Pew Center on the States

Florida's economic failings land it on worst 10 list 11/11/09 [Last modified: Thursday, November 12, 2009 7:07am]
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