Budgets

Yesterday, Florida’s Governor, Rick Scott, announced his budget proposal at a highly partisan Tea Party event (Miami Herald’s wording, not mine).  There are a lot of cuts.  A lot of cuts.

I am not saying that there shouldn’t be any cuts – there needs to be due to the economic situation and the shortfall confronting states – but there also has to be a balance between short term savings and long term interests.   I am not sure that his proposed budget meets this balance. Lat night in class we were discussing how does one go about prioritizing social policies.  Is it more important to house the homeless or feed the hungry?  Maybe they are both deemed important along with other crisis provisions and instead a community decides that the the arts and culture organizations can be cut. Okay, so we get rid of them, and in the short term, it frees up some money to care for the needy and provide some educational services, and that is cut back too, but the larger questions is how do we turn the current situation around?  What is needed?

Well, jobs are needed and to attract business a community needs to be able to demonstrate that the business will do better in that area as opposed to another area.  How is this done? By having a community that is attractive, a sense of culture and the arts to entice the upper levels of management to live there, and more importantly that has an educated work force for the company to thrive.  The other part of the equation it to have enticing tax rates and other incentives in place for a business that is willing to come to the area. That is a rather simplistic, bare bones was of looking at it, but for simplicities sake, it will do.

So how does Florida look before the proposed cuts in comparison to other states in regard to some of the biggies: education, business tax rates, sales tax rates, and health indicators (FL has not income tax, so that is left out)?  Luckily, I also teach a class that looks at this, and this is what it looks like:

Investing in tomorrow’s workforce (per pupil expenditure)

Corporate Income Tax Rates:

Sales Tax rates:

Health indicators:

Clearly, Florida does not come last in these categories, but it is in lower half of all states.  I am not saying that there should be no cuts in Florida’s budget and the solution is to only raise taxes.  Not at all!   The reality is that a balance between cutting expenses and increasing revenue is the pragmatic way to go.  the difficulty, at least politically, is finding a balance that does not negatively impact the state’s long-term prospects.  Cutting education too much will impact tomorrow’s workforce.  Gutting family services now will impact tomorrow’s neighborhoods, crime, and education.  Raising taxes too much for corporations will make Florida less attractive to do business in.   It is all in the balance, and one can only hope that a balance will be found when Scott’s proposed budget is integrated with the legislature’s budget.   We’ll see in 5 to 10 years if the budget that comes out of this process finds that balance.