By Myriam Marquez
Published March 6, 2009 - The Miami Herald
Back in 2005, Florida was on top of the world.
The state led the nation in job growth. Construction cranes were everywhere in South Florida. And property values were up in the clouds.
That year, the nonpartisan LeRoy Collins Institute at Florida State University issued an in-depth analysis of Florida's tax-and-spend policies, including Medicaid, education, children's health and welfare. The report's conclusion: Florida was too reliant on the housing boom and tough times were sure to come.
WARNING WAS ACCURATE
Now the tough times are here, and the institute's warnings -- and its prescriptions for tax fairness and growth -- couldn't be more prescient.
Florida's construction industry is a bust and housing prices have tanked. State and local tax revenues can't keep up with the needs. We led the nation in job losses last year, with several economists predicting that this state may be among the last to recover.
Gov. Charlie Crist is looking to the federal stimulus package as the ''bridge'' that will get us through the tough times and fill most of the $5.5 billion budget hole this year. The problem is his plan has the potential to dig Florida deeper into the financial hole if the state doesn't recover in two years. That's because the stimulus funds are short-term and Florida's tax structure needs a long-term fix.
I know. It's nuts to raise taxes in a recession.
But as one who grew up here and raised two kids here, I haven't seen state leaders ever point to a ''good'' time to raise taxes. In the high-rolling years, state and local governments look to more building to bring more revenue. Over and over again, our political leaders in Tallahassee have shied away from going after the structural changes we need, instead relying on tinkering around the edges with a court fee here and a road toll there.
The institute's "Tough Choices" report and its various updates the past three years point to Florida's weaknesses. Among them, the state's share of K-12 education funding dropped like a rock as it looked to local property taxes to cover the difference. The past two years, public schools have been hit hard with cuts as property values plummeted.
There's a push in the Legislature to look at raising the cigarette tax, and Crist wants the Seminoles' casino deal approved, but those revenues still fall short.
CLOSE TAX GAPS
Fixing Florida's sales-tax system and its exceptions should be a matter of fairness. For instance, why does the sales tax apply to commercial properties but not to residential ones? And that's just a little exemption. There are a few hundred that should be evaluated on their merits.
The biggest unfairness is billions lost to companies that sell their stuff on the Internet. Florida law requires sales tax to be applied to those sales, but the companies don't bother collecting it, and buyers certainly aren't going to send a check for six pennies on the dollar to Tallahassee.
Those pennies add up to $3 billion a year. And those companies are unfairly competing with retailers that provide jobs in Florida.
Crist and the Legislature need to draw the line at Internet sales and tax them. Because of a 1992 Supreme Court ruling, it will take a federal law to make sure states have the authority in a system that ought not overwhelm online vendors with 50 different tax rates. That's fair enough.
The National Governors Association has developed the streamlined sales tax project for online sales. Why isn't Crist, the ''people's governor'' and the president's pal, leading the charge?