Florida The Economy, Taxes and Results - A Balanced Approach is Needed Presentation to the National Association of Social Workers - Florida John Hall Florida.
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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
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 48 th in real growth in 2008 – 2 nd in 2005. Unemployment at 12.2% in February, 2010 – 1.1 million jobless! Loss of over 900,000 jobs in three years.
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.
Florida’s Economy High level of income inequality – 7 th and 15 th 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.
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
More families are struggling. Do we have enough revenue to meet their needs?
Bottom line in FY 2010-11… Gap between revenue and “critical and high priority needs” is up to $3.2 billion (no FAMP extension).
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.
Gaps do not address Reserve Funds Down to $274 million.
What About Florida’s tax system? 2 nd 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.
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).
Is Florida a high tax state? 40 th in state & local tax burden as a % of personal income. 40 th in state per capita tax burden - $600/person below national average.
Low taxes may or may not be a good thing. What are the results? High school graduation rate is 58% - 47 th worst. “Talent Gap”. Health system is 45 th worst. Children’s dental health gets an “F”.
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.
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!
How about a balanced approach? Florida Legislators should not just cut spending. A balanced approach that includes revenue should be used!