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Follow the Yellow Brick Road: The Path to Fairness and Prosperity

Follow the Yellow Brick Road: The Path to Fairness and Prosperity. Karen Woodall Coalition for Fair and Comprehensive Tax Reform and Florida Center for Fiscal and Economic Policy August 2010. The Landscape Last Legislative Session $3.2 billion budget gap in 2010

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Follow the Yellow Brick Road: The Path to Fairness and Prosperity

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  1. Follow the Yellow Brick Road:The Path to Fairness and Prosperity Karen Woodall Coalition for Fair and Comprehensive Tax Reform and Florida Center for Fiscal and Economic Policy August 2010

  2. The Landscape Last Legislative Session $3.2 billion budget gap in 2010 More than a million Floridians unemployed – 12.3%, 3rd highest in nation 2nd highest filings for foreclosure, third highest actual foreclosure rate Growing numbers receiving food stamps – 2.6 million in March Increases in Medicaid participants – up 200,000 from 2009 Numbers of Floridians without health insurance – 3.6 million in 2008, or 20% of Floridians Tens of thousands eligible for services but on waiting lists In the 2009 legislative session, some new revenues raised: Motor vehicle licenses and fees Cigarette surtax College tuition

  3. The Legislature’s 2010 Path Led to: Using $2.3 billion in federal stimulus funds to close the budget gap Seminole Gaming Compact raises $435 million in 2010-11 and at least $1 billion over next five years Over $500 million taken from trust funds and placed in General Revenue to reduce budget cuts Another tuition increase Cuts made: People with developmental disabilities Medicaid waivers for the elderly Mental health and substance abuse services Healthy Families Healthy Start

  4. Legislature’s 2010 Path Also Led to: New tax breaks (“jobs”) for: film and television productions manufacturing equipment the space industry aircraft buyers buyers of yachts, by limiting the sales tax to $18,000, the amount charged on a $300,000 boat buyers of tickets to professional all-star sporting events * Tax breaks = budget expenditures

  5. Missed Opportunities Revenue raised from tax fairness measures: $0.00 Missed opportunities to replace stimulus dollars and modernize Florida’s tax structure: reinstate the intangibles tax on millionaires (SB1406) combined reporting requiring multistate corporations to pay tax on Florida profits (SB2502) remove exemption on bottled water (SB152) sales tax on internet orders (SB204)

  6. The Road Ahead Stimulus funds going away: More than $21 billion of federal money has been pumped into Florida’s economy, either into the state budget or directly into other services $5-$6 billion projected budget gap: Continuation of current (already reduced) programs and services $215 million a year must be repaid to the Budget Stabilization Fund for five years Repay at least $130 million in interest on federal loans for unemployment compensation Lost revenue from oil disaster (unknown) Slight increases in projected revenues

  7. Meanwhile… Unemployment still is 11.4%, 5th highest in the nation 47 of 67 Florida counties have double-digit unemployment 50% of applicants for unemployment benefits have been denied Florida has the third-lowest rate of unemployed workers actually collecting benefits Florida is one of 11 states that has not modernized its unemployment system, leaving half a billion dollars in stimulus money uncollected Population growth stagnant

  8. Still the 3rd highest foreclosure rate in the U.S. 48% or 2.2 million Florida homeowners are “underwater” Housing Trust Fund raided Legislation failed that would have removed cap on the Trust Fund, using funds for improvements, creating nearly 15,000 jobs and over $1.4 billion in economic activity while reducing the 300,000 empty houses on the market Maintenance of effort (MOE) requirements in Medicaid end with loss of stimulus money, putting Medically Needy, seniors, pregnant women and disabled at risk Food stamps and Medicaid caseloads still growing in July (2.8 million) (2.4 million)

  9. Which Path Will the Legislature Take in 2011?

  10. Eliminate Corporate Income Tax Reduce Corporate Income Tax Eliminate Medically Needy Program More Tax Exemptions Eliminate eyeglasses, dentures, hearing aids Dig the hole deeper? CutPrenatal Care Reduce funding for local services Increase class sizes

  11. OR…. Take a balanced approach that includes new revenues without asking the same businesses and individuals to pay more: close some sales tax loopholes modernize the unemployment system modernize the sales tax eliminate subsidies to sports teams collect tax on internet sales make multistate companies pay their fair share

  12. Brains, Heart…and Courage

  13. Progress is possible, even when obstacles lie ahead

  14. Build the road to prosperity and fairness The Yellow Brick Road For more information, visit www.fcfep.org

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