Florida lawmakers, facing the onerous task of building a 2010-11 state budget with the glimmer of modestly increasing revenue but fast-growing expenses, have largely dismissed Gov. Charlie Crist's proposed spending plan. They've balked at its $69.2 billion size, roughly 4 percent higher than the current year, and lamented his use of creative financing. Yet Crist is right that the state should start investing again in improving education and protecting the environment — even if he is on shaky ground about paying for it.
Underlying Crist's budget premise is his belief that the state economy is finally turning a corner. Home sales were up in 2009 and Florida is adding residents — 70 per day — after losing them for a period last year. The growth is expected to increase sales taxes and real estate transaction fees, but not nearly enough to cover the higher cost of state government without more revenue.
Florida needs to regain some of the ground lost amid the worst days of the recession. Crist calls for spending $7,045 per public school student, the second highest rate ever and $179 more than this year. He wants to spend $167 million more on the state's universities and community colleges and invest in key initiatives to restore the Everglades and buy conservation land under the Florida Forever program. Those are priorities the state has long embraced, and it is time to get back on track.
To finance a bigger budget, Crist is depending on more money from the federal government, both in stimulus dollars and money for Medicaid, the federal-state health care program for the state's low-income people, the disabled and children. He's betting the Legislature, and eventually voters, will agree to rework the state's class-size amendment to save money. And he's counting on the Legislature to finally strike a $433 million compact with the Seminole Indian Tribe due to expanded gambling — a deal that is long overdue. All of those are reasonable assumptions.
But Crist also calls for sweeping $585 million in reserves, including $233 million from the Lawton Chiles Endowment Fund, as he seeks a back-to-school sales tax holiday and a pair of business tax breaks. That's more short-term political posturing than sound long-term economic policy.
Crist proposes reinstating the sales tax holiday, which would cost the state $52.1 million. The state could not afford this giveaway the last two years, and it still can't. The governor's two business tax breaks, cutting corporate income taxes by $57.4 million and delaying an increase in unemployment taxes, also are fiscally suspect. The state should not cut revenue while simultaneously raiding reserves and borrowing from the federal government to pay unemployment claims.
Politically, it is easier for legislators to dismiss Crist's budget plan and start slashing than to acknowledge what he has gotten right: Reinvest in education and the environment, collect the revenue from the ongoing expansion of gambling on Seminole lands, and get what help Florida can from Washington. That's where the discussion should begin.