Florida state budget (2008-2009)
From Sunshine Review
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Florida is one of five states that have been hit the hardest by the mortgage crisis and foreclosures along with California, Arizona, Nevada and Illinois. [1] On January 14, 2009, the Florida legislature passed a deficit-elimination package aimed at closing the $2.8 billion gap facing the Florida state budget. [2] Florida is slated to receive $12 billion from the federal government as part of the American Recovery and Reinvestment Act signed by President Obama on February 17, 2009. [3] These funds will be given over the next three years and are expected to ease the state's budget crisis and eliminate the need to reduce government services and jobs. [3]
[edit] Florida's Economy
According to data supplied by State of Florida, these are some of the major economic areas concentrated in the state.
- International Trade (40% of all U.S. exports to Latin and South America pass through Florida)
- Tourism - with 76.8 million visitors in 2004 (a record number), Florida is the top travel destination in the world. The tourism industry has an economic impact of $57 billion on Florida’s economy.
- Space Industry - The space industry represents $4.5 billion of the state's economy. The average annual wage of aerospace workers is approximately $52,000. The number employed at Kennedy Space Center (KSC) alone is 15,000 and Florida ranks 4th among the states in overall aerospace employment with 23,000 jobs.
- Agriculture – Florida leads the southeast in farm income. Florida produces about 75% of the U.S. oranges and accounts for about 40% of the world's orange juce supply.
- Construction - This industry's strength results from the steady stream of new residents and visitors who are welcomed to Florida each year.
- Services - growth in high tech, financial & back office operations
- Software - many small, entrepreneurial companies
- Health Technology (medical, biotech, laboratories)
- University Research - more than $500 million per year in sponsored research at Florida universities
- State Spending Per Capita 1998 - Florida Ranks 49th ($2,628)
The Tax Foundation declares that Florida's state and local tax burden has been among the nation's lowest. Estimated at 7.4% of income, Florida's state/local tax burden percentage is ranked 47th nationally, well below the national average of 9.7%. Floridians pay $3,441 per capita in state and local taxes.
- Florida's 2009 Business Tax Climate Ranks 5th
- Florida Levies No Individual Income Tax
- Florida's corporate tax structure consists of a flat rate of 5.5 percent on all corporate income, which ranks 40th highest among states that tax corporate income. In 2006, state-level corporate tax collections (excluding local taxes) were $132.99 per capita and ranked 31st highest nationally.
[edit] The Budget Process
Florida's fiscal year runs from July 1 to June 30 of the following year. [4] Each July, the Governor's office and that state legislature issue directions to state agencies to begin developing budget requests for the upcoming year. [4] The agencies submit their budget proposals to the Governor by mid-October. [4] The Governor's office reviews the requests in light of the available funds and economic conditions and submits the budget to the legislature for review. [4] The state's House and Senate pass appropriation bills that are ultimately incorporated into a General Appropriations bill that is presented to the Governor for final review and signature. [4]
The state's Governor can use a line-item veto to cancel specific appropriations without having to reject the bill in its entirety. [4] The Governor's veto can be overridden only by a 2/3 vote of the members of each house. [4]
[edit] Budget Status, 2008-2009
As early as November of 2006, Florida had the second most foreclosures in the country with 95,862 homes foreclosed upon in just the third quarter of that year. [5] In November of 2007, Florida's government began withdrawing money from a multi-billion dollar investment pool that funded local cities and school districts over concerns of investments linked to subprime mortgages. [6] In 2007, Florida also began cutting spending in an effort to balance the budget. [7] A year later, in December of 2008, Florida only trailed Arizona in the number of foreclosures, and it implemented a voluntary, 45 day moratorium on home foreclosures. [8] Although this led to a 20% decline in foreclosures for January, 2009, the Florida foreclosure rate remains 1 in 214 homes. [8] The collapse of the housing sector is a major concern, particularly since it is predicted to continue on its downward spiral until 2010-2011. [9]
In addition to the far-reaching effects of the mortgage crisis, Florida faces long-term budget problems as a result of a decline in its major economic engines -- building, migration and tourism, which have all declined. [3] State revenue has declined for three years in a row, and the new fiscal year beginning July 1, 2009, could be the fourth. [7] With the fall in property taxes, school districts remain underfunded. [7] Also, since Florida does not have an income tax, it relies heavily on sales tax, corporate tax and real estate transaction taxes, which have all declined. [7]
The following table provides a glimpse into state expenditures and gross domestic product from 2000 to the present.
| Fiscal Year | General Funds Expenditures | Gross Domestic Product (Millions) |
|---|---|---|
| 2001 | $91,800 [10] | $497,423 [11] |
| 2002 | $99,300 [10] | $522,719 [11] |
| 2003 | $107,400 [10] | $559,021 [11] |
| 2004 | $115,500 [10] | $607,284 [11] |
| 2005 | $130,900 [10] | $670,237 [11] |
| 2006 | $140,500 [10] | $716,505 [11] |
| 2007 | $150,900 [10] | $734,519 [11] |
| 2008 | $162,200 [10] | $753,000 [10] |
[edit] The 2008 Deficit-Elimination Package
On January 14, 2009, the Florida legislature passed a deficit-elimination package, in an effort to close the budget shortfall for 2008. [12] The plan included:
- increases in traffic fines of $10 for every traffic ticket issued except for speeding tickets which went up by $25 and an elimination of an 18% discount on tickets for those enrolled in driver's improvement courses; [12]
- a suspension in the environmental land program saving $4 million and cancelling $250 million in bond sales; [12]
- a 10.5% cut in Medicaid payments to nursing homes and a tax increase on nursing homes; [12]
- a transfer of $400 million from a Rainy Day Fund, leaving about $250 million in the fund; [12]
- a $466 million cut in education spending, an option for school administrators to volunteer for pay cuts and limiting the severance of teachers and administrators to one year; [12]
- a 2% decrease in teacher's bonuses, saving the state $11 million; [12]
- a 4% cut in aid to state universities and community colleges for a savings of $157 million; [12]
- $700 million to be borrowed from a $1.2 billion endowment that invests money from tobbacco settlements for future use on healthcare programs; [12]
- a $9.9 million cut in the state's public/private tourism agency, Visit Florida; [12]
- a 5% cut in a program that helps people with developmental disabilities, including autism; [12]
- an $190 million cut in a program that helps pay for low and moderate-income housing; [12]
- an elimination of 1,400 state jobs [12]; and
- a $3.75 million decrease in funding for cancer, cardiovascular, stroke and pulmonary diseases[12].
[edit] Stimulus Funds
In February of 2009, Governor Crist requested $2.3 billion in funds from the federal government. [13] Governor Crist stated, "I'm not a big-government fan, but there are times when government needs to help." [13] With President Obama's signing of the stimulus bill on February 17, 2009, Florida now expects to receive $12 billion in federal funds. [7] Governor Crist believes that the federal fends will be enough to avoid further spending cuts if the legislature approves an agreement allowing Seminole Indians to expand gambling at tribal casinos in exchange for paying the state millions of dollars per year for the freedom to do so. [7]
Of the $12 billion, Florida may not be eligible for $3.5 billion because of a requirement that states that accept stimulus money should not lower education spending below 2006 levels. [14] Florida has asked Secretary of Education Arne Duncan for a waiver so that they may receive the full $12 billion. [14] [15]
On March 8, 2009, The Miami Herald reported that the state is considering borrowing against the Florida Prepaid College Board, a fund into which parents pay in order to lock in tuition rates for their children's future college tuition. [16] Some believe that because the fund is guaranteed by the state, the state should be able to borrow against the $8.8 billion fund. [16] Others disagree arguing that the state does not have the right to borrow against the fund and further, that this is another example of "lawmakers pillaging savings accounts and special funds". [16]
[edit] State budget websites and analysis
Florida currently has some level of transparency, including "Florida's Checkbook", an online spending database created by the state's Chief Financial Officer, Alex Sink.
Certain public agencies have failed to comply with open records laws.[17]
[edit] Economic Stimulus Transparency
- The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.[18]
- It is estimated that Florida will receive at least $7.7 billion in federal funding.[19]
- The economic recovery website for Florida is available here.
[edit] Legislation
Florida Senate Bill 1796 "Directs the Legislative Auditing Committee to provide oversight and management of a state website providing information on governmental appropriations and expenditures" and "Requires the Executive Office of the Governor to establish a website providing information relating to each appropriation in the General Appropriations."[20] SB 1796 was signed by Governor Crist on May 27, 2009.[21]
[edit] Government tools
The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database (in this case, Florida's Checkbook Online):
| State Database | Searchability | Grants | Contracts | Line Item Expenditures | Dept/Agency Budgets | Public Employee Salary |
|---|---|---|---|---|---|---|
| Florida's Checkbook |  |  | | | | |
[edit] Limitations and Suggestions
Florida's Checkbook should post employee salaries just as other state transparency sites (such as the Missouri Accountability Portal) do.
[edit] Support for creation of the database
The National Taxpayers Union urged Representatives to support House Bill 181, which would have created a spending transparency database.[22]
Americans for Tax Reform also urged for transparency,[23] and made a statement to the Florida Finance and Tax Committee.[24]
[edit] Public employee salary information
The Bay Tax Foundation requested the names of the "renewed members of the pension fund from Bay County, the agency they work for, their salary in 06-07, the date they retired and their retirement benefit collected." Some of this information has been made available under "links" on this page.
[edit] See also
[edit] External links
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
- James Madison Institute
- Tax Foundation website
- Bay Tax Foundation
- Florida Legislature
- Florida Office of Policy and Budget
- Florida Government spending
[edit] References
- ↑ Fox Business, News Ideas by Brian Sullivan, "Nationwide Crisis" or Speculative Fallout?, February 19, 2009
- ↑ Florida Today, Florida deficit-elimination plan passes, January 14, 2009
- ↑ 3.0 3.1 3.2 Herald Tribune, Florida's Stimulus: $12 Billion, February 17, 2009
- ↑ 4.0 4.1 4.2 4.3 4.4 4.5 4.6 Florida Governor Charlie Crist, The People's Budget, Budget Process Overview
- ↑ Foreclosurelistings.com, Florida Ranks Second Among States with Most Foreclosures, November 13, 2006
- ↑ New York Times, Fund Crisis in Florida Worrisome to States, December 5, 2007
- ↑ 7.0 7.1 7.2 7.3 7.4 7.5 MSNBC, More spending cuts likely for Florida budget, February 18, 2009
- ↑ 8.0 8.1 Tampa Bay's 10 Connects.com, 1 in 214 Florida Homes in Foreclosure, February 12, 2009
- ↑ Builder Online, South Florida's housing market recovery won't be anytime soon in Miami Dade county
- ↑ 10.0 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 US Government Spending, Florida State and Local Spending, 1992-2010
- ↑ 11.0 11.1 11.2 11.3 11.4 11.5 11.6 Iowa Workforce, Florida
- ↑ 12.00 12.01 12.02 12.03 12.04 12.05 12.06 12.07 12.08 12.09 12.10 12.11 12.12 12.13 MSN Money, Florida's $2.88 deficit-elimination plan at a glance, January 14, 2009
- ↑ 13.0 13.1 The Voyager, College Media Network, State budget cuts continue, January 29, 2009
- ↑ 14.0 14.1 The Ledger, Schools Will Get Help, but Not Across the Board, February 17, 2009
- ↑ Wakulla County Real Estate, "Senate Budget Panel Questions Whether Crist Budget Plan is Feasible", March 9, 2009
- ↑ 16.0 16.1 16.2 The Miami Herald, State weighs tapping into prepaid tuition fund for economic relief", March 8, 2009
- ↑ Sun Sentinel, "Many Florida public agencies flunk simple open records test," November 28, 2008
- ↑ National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- ↑ Wall Street Journal, "Stimulus Spending by State"
- ↑ Florida Senate, "Senate 1796: Relating to Governmental Financial Information," Accessed June 16, 2009
- ↑ Office of the Governor, "Governor Crist's Bill Actions Today," May 27, 2009
- ↑ National Taxpayers Union, "An Open Letter to the Florida House of Representatives: Taxpayers Support Online Spending Transparency (HB 181)," March 14, 2008
- ↑ Americans for Tax Reform, "Letter," March 26, 2008"
- ↑ Americans for Tax Reform, "Transparency in Government Spending – A Way for Florida to Lead the Nation," February 21, 2008
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