1 Florida’s Escalating Fiscal Crisis: The Problem Florida Center for Fiscal and Economic Policy December 2008

2 Causes of Florida’s Fiscal Crisis  The Economy  Inadequacies of Florida’s Tax Structure

Budget Shortfalls & Cuts Florida’s budget has been spiraling downward for the past three years: $73.6 billion $66.2 billion An additional shortfall of at least $2.14 billion is predicted for the current fiscal year-- and about $6 billion in

4 Education Funding Cuts: This year education appropriations were reduced almost 9% or $2.1 billion Public schools = declined 7.6% State universities = decreased by 7.9% Community Colleges = a 12.3% decline

5 Cuts to Florida’s Education System Total per student funding declined by $156 per student Florida is ranked 49 th in per capita state and local government expenditures for education

6 Consequences of Under Funding Education Our high school graduation rate is the 44 th lowest in the country and is 10% less than the national average 55% of students entering college in Florida require remediation

7 Priorities? In the past 3 years, Criminal Justice and Corrections is the only area of the budget that was INCREASED! More money for prisons and less for public education!! (We suspect this is an unintended consequence)

8 Health/Human Service Funding Essentially Frozen Since There is a big gap between the need for services and the capacity of health and human services programs to address it. The need for services is increasing as the economy worsens.

9 Under funding health and human services Caseloads -- child protection workers and staff to patient ratios in nursing homes are still below national standards! Community services for people with disabilities, already funded much less than the national average, were cut more and were capped last session.

Too Many People Lack Health Insurance About 21% of the state’s population is uninsured and 19% of all children are uninsured Florida ranks third in the nation in the number of uninsured children

Thousands of people on WAITLISTS! SENIORS 5,000 waiting for the nursing home diversion program 1,493 waiting for Home Care for the Elderly 17,254 waiting for services for Community Care

WAITLISTS People with Developmental Disabilities 23,000 are waiting for community services and supports

WAITLISTS More than 17,000 people are waiting for substance abuse treatment About 190,000 adults with mental illness do not receive the services they need About 309,000 children with emotional disturbances do not receive the services they need

Poverty is Rising Food stamp participation is up – higher caseloads than any in past 10 years! The need for Medicaid is growing – caseload expected to increase by 9.2% next year!

15 Tax Revenues Are Insufficient To Meet Needs of the People The shortfall in this year’s budget is at least $2.1 billion Next year’s shortfall is expected to climb to over $5 billion

16 WHAT SHOULD WE DO?? We do have CHOICES…… other than …… MORE BUDGET CUTS!

17 Some Immediate Choices Florida has about $6 billion in reserve funds The budget shortfall this fiscal year could be addressed with reserve and trust funds

18 Immediate Choices $21.5 Million Can be Saved by Ending Subsidies to Sports Teams and Facilities

Stop Subsidies World Golf Hall of Fame $2 million annual subsidy Game Fish Association Museum $1 million annual subsidy

Stop Subsidies Facilities for the following teams receive $2 million a year in subsidies Pro Player Stadium (Marlins) Alltel Stadium (Jacksonville Jaguars) Tropicana Field (Tampa Bay Devil Rays) St. Pete Times Forum (Tampa Bay Lightning) Home Depot Stadium (Florida Panthers) Raymond James Stadium ( Tampa Bay Buccaneers) Amway Arena (Orlando Magic)

21 Stop Subsidies Each team gets $500,000 a year for a total of $2.5 million in subsidies for spring training. Philadelphia Phillies /Clearwater Toronto Blue Jays/Dunedin Los Angeles Dodgers/Indian River Detroit Tigers/Lakeland Houston Astros/Osceola co.

22 Review/Repeal Tax Exemptions and Exclusions that Do Not Serve a Broad Public Purpose Florida’s tax structure is antiquated, unfair and unbalanced! More revenue is exempted from the state sales tax than is collected!

Examples: Charter Fishing Boats $63.5 Certain Advertising Services $14.6 Boats Temporarily Docked in Florida $ 5.0 Feed for poultry, livestock, race horses, & Ostriches $27.9 Newspaper & Magazine Inserts $41.0 Bottled Water $42.0 Sales of Boats & Planes Removed from the State $74.2 TOTAL in lost revenue $268.2 million

24 Other Choices Others have proposed ideas. Examples include: – raise the cigarette tax by $1 per pack, estimated to raise $1 billion – tax internet sales – estimated to raise $1 billion

25 So What Now? Help change the debate!  Florida cannot afford to continue down the path of cutting services  It is time to make our tax system fairer and more modern

Tell your state legislators:  Use existing reserves and trust funds to cover this year’s shortfall  Raise additional revenues to replace the reserves and address next year’s shortfalls while modernizing Florida’s tax structure so that it’s fair

The Center will be publishing additional recommendations in the next few weeks. Sign up for a copy of the report!

28 In Crisis there is opportunity! Karen Woodall, Director, Outreach and Education