Great reading in the Miami Herald that the our state is growing at such a pace that the governor has the pleasant task of cutting taxes and, at the same time, being able to increase spending in a number of vital areas of our state — paramount being education. Unfortunately, even with the proposed increase in educational spending to $7,176 per student our state is still far behind such states as New York which spends $19,552 and the District of Columbia spending $17,468 per student (2012 figures).
Education is vitally important to the growth of our state’s economy. Especially with the governor’s much bragged about solicitation of out-of-state employers to “come on down; move to Florida.”
Without a large pool of educated residents from which major corporations can solicit employees we will be hearing: “Sorry, the sun and sand are fantastic and it’s very cold up here, but more important we need employees that demonstrate skill levels to match our job requirements.”
The governor is proposing a tax and fee cut of $470 million in the coming budget in cellphone and cable television charges that would save $3.58 a month for the average family that spends $100 a month. Economists will tell you, and it is true, that the $470 million saved by residents of Florida, while a small savings to the individual, when injected through spending will stimulate economic growth in our state.
Looked at from another view, if we each gave up that $3.58 a month which I am sure we could all afford, we could inject that $470 million into education which would increase individual student spending by $181.63 a year. In the long run, the additional investment in education and its benefits would far outweigh the benefit of the residents of Florida spending that extra $3.58 a month on food, clothes or reducing credit card balances with out-of-state lenders.
The governor is facing a wave of resistance from members of the Florida House and Senate who also favor tax cuts but would much prefer using the $1 billion surplus on tax cuts for Florida businesses. The logic: if Florida corporations pay lower taxes, they can cut the price of their goods or services. This creates a greater demand for their business. Increased sales demands increased production, which in turn creates a need to hire more employees.
On the other hand, the bad news is that the state will lose $1.3 billion in federal funds to finance hospitals treating the poor and uninsured patients. This is putting pressure on the state’s taking a pass on receiving federal funds to finance the expansion of state Medicaid benefits. Hospitals aren’t going to be able to help members of the lower income working class with their medical needs.
The official word out of Tallahassee was that the state did not want to set the expanded program in motion depending upon money from Washington only to lose funding at some future date and then be stuck having to cover the program with state funds or cancel the expanded benefits for thousands of Floridians.
The governor further proposes saving the state the cost of salaries and benefits by cutting 1,353 state employee positions. This could save the state an estimated $101.4 million (1,353 employees at an average annual total cost of $75,000). The downside is that 1,353 individuals will go on unemployment — a cost to the state. And, even more important, have a demoralizing effect on the families of those losing their jobs.
The governor and legislators have a difficult, but enviable, task of figuring out how to spend the additional revenues the state is projected to receive in the coming fiscal year. The choices: do we cut the taxes we will receive down to the level of the current cost of running the state, do we keep the higher tax revenues and figure out how to spend it, or do we do a little of both.
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