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Florida The Economy, Taxes and Results - A Balanced Approach is Needed

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.

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Florida The Economy, Taxes and Results - A Balanced Approach is Needed

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  1. FloridaThe 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

  2. Our economy is in hot water!

  3. 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.

  4. 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.

  5. 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.

  6. Florida’s Economy The 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

  7. More families are struggling. Do we have enough revenue to meet their needs?

  8. Bottom line in FY 2010-11… Gap between revenue and “critical and high priority needs” is up to $3.2 billion (no FAMP extension).

  9. 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.

  10. Gaps do not address Reserve Funds Down to $274 million.

  11. YIKES

  12. 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.

  13. 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).

  14. 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.

  15. 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”.

  16. 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.

  17. 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!

  18. How about a balanced approach? Florida Legislators should not just cut spending. A balanced approach that includes revenue should be used!

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