florida the economy, taxes and results - a balanced approach is needed
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Florida The Economy, Taxes and Results - A Balanced Approach is Needed. Presentation to the National Association of Social Workers - Florida John Hall Florida Center for Fiscal and Economic Policy April 2010. Our economy is in hot water! . Florida’s Economy. - PowerPoint PPT PresentationTRANSCRIPT
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FloridaThe Economy, Taxes and Results -A Balanced Approach is Needed
Presentation to the National Association of Social Workers - Florida
John HallFlorida Center for Fiscal and Economic Policy
April 2010
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Our economy is in hot water!
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Florida’s Economy• Stagnant population growth – lost over 57,000 people between
2008 and 2009.
• Growth rate in Personal Income declined to 43rd in the Country in Q1 2009.
• GDP ranked 48th in real growth in 2008 – 2nd in 2005.
• Unemployment at 12.2% in February, 2010 – 1.1 million jobless!
• Loss of over 900,000 jobs in three years.
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Florida’s Economy
• Nearly 50% of all mortgages are “underwater” – 2 million homes.
• Home foreclosures and “shadow inventory are 23.5% --- 78% above national average.
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Florida’s Economy
• High level of income inequality – 7th and 15th largest gaps between the middle income and the poorest families than the affluent.
• Almost 50% of our jobs pay at or below 150% of the federal poverty level.
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Florida’s EconomyThe long range financial outlook is worse since forecasted six months ago.
FY 2010-11 Recovery Forecast
• No growth in population• Weak growth in personal income• Weak growth in employment
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More families are struggling.
Do we have enough revenue to meet their
needs?
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Bottom line in FY 2010-11…
Gap between revenue and “critical and high priority needs”
is up to $3.2 billion (no FAMP extension).
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Bottom line in 2 years…
Worse!
• Gap between revenues and “critical and high priority needs” is $5.4 billion in FY 2011-12.
• Gap is $5.2 billion in FY 2012-13.
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Gaps do not address Reserve Funds
Down to $274 million.
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YIKES
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What About Florida’s tax system?
• 2nd worst tax system in the US. – low income families pay 6 times more of their income in taxes than the wealthy – middle income is 4 times more!
• No “progressive taxes” - personal income tax or intangibles tax on wealth.
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Florida’s tax system
• 75% of General Revenue is sales tax.– Primarily a consumption tax. Yet, our economy
is based mostly on services.
• Huge loopholes in corporate taxes for large multi-state businesses.
• Many businesses are exempted from corporate taxes (over $20 billion in profits not taxed).
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Is Florida a high tax state?
• 40th in state & local tax burden as a % of personal income.
• 40th in state per capita tax burden - $600/person below national average.
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Low taxes may or may not be a good thing. What are the results?
• High school graduation rate is 58% - 47th worst.
• “Talent Gap”.
• Health system is 45th worst .
• Children’s dental health gets an “F”.
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Low taxes may or may not be a good thing. What are the results?
Thousands on “waitlists”-– 28,000 elderly.– 19,000 disabled.– 17,000 substance abuse.– 190,000 adults and 200,000 children need mental
health services.– 200,000 families need financial assistance with
childcare.
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Legislative developments
• Balanced Approach is Needed – not just cuts.
• More Tax Breaks and Loopholes for Business- over $800 million under consideration.
• Revenue – bottled water bill – SB 152 and HB 167.
• TABOR – SJR 2420!
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How about a balanced approach?
Florida Legislators should not just cut spending.
A balanced approach that includes revenue should be used!