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A Times Editorial

Florida economy: from bad to worse

The latest economic forecast for Florida: grim, with a 100 percent chance of becoming grimmer. Economists estimated Friday that the state's budget shortfall for this year is more than $2.1-billion, and next year's shortfall will be more than twice that amount. The Legislature should call a special session to create a mix of targeted spending cuts and revenue increases to get through the remainder of 2008-09, then focus on a broader overhaul in the spring.

This is not a hole that is going to be filled by tapping reserves and accounting tricks. The Lawton Chiles endowment, which uses tobacco settlement money to pay for health care programs, is down to $1.1-billion from its June level of $2.1-billion because of stock market losses and money that already has been spent to help cover the budget shortfall. A 4 percent across-the-board spending freeze that Gov. Charlie Crist has imposed is a blunt instrument and does not save enough money, either.

There is always room for targeted spending reductions and greater efficiencies, but Florida cannot responsibly cut its way into the black. The impact on higher education, public schools, social services and the courts already is severe, and the state has legal and moral responsibilities to Floridians that must be fulfilled.

The pain already is being felt throughout the Tampa Bay area. In Pinellas, the school district has cut more than $48-million in spending and spent more than $10-million in reserves over the last three years. More than 500 positions have been cut, and the overhaul of middle school schedules to save money has created a mess and violated the teachers' union contract. Meanwhile, Pinellas Sheriff Jim Coats has suggested he will hand child abuse investigations back to the state if lawmakers impose further spending cuts in the program.

In Hillsborough, the School Board expects to meet Tuesday to discuss potential additional cuts of $36-million on top of the reductions that already have been made. The courts already have cut 15 positions even as home foreclosures and other economic-related filings have increased the workload.

In the short term, legislators are going to have to raise some revenue to avoid cutting thousands of jobs, shutting the doors to universities and bringing the legal system to a grinding halt. But a crisis also can be powerful motivation to tackle some broader issues. There are some forward-looking options: Closing sales tax exemptions on some goods and services to broaden the revenue base; expanding collection of sales taxes on catalog and Internet sales, and taxing a portion of an out-of-state corporation's profits that can be tied to the operation of its Florida subsidiaries.

The governor and the Legislature have a duty to aggressively respond to the deepest budget crisis Florida has experienced in decades. Dipping into reserves, cutting spending across the board and hoping for the best is no longer an option.

Florida economy: from bad to worse 11/22/08 [Last modified: Thursday, November 27, 2008 12:59pm]
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