Crist, leaders present goals to bolster growth
Published: Friday, January 11, 2008 at 6:01 a.m.
Last Modified: Friday, January 11, 2008 at 12:00 a.m.
TALLAHASSEE - Conflicting messages from government and business leaders about the Jan. 29 property tax amendment and other ways to stimulate Florida's sagging economy illustrate the difficulty legislators face heading into the 2008 legislative session.
The state is faced with a $2 billion to $3 billion shortfall in revenues with a $70 billion budget because of sales tax revenue shortfalls, the fallout from a housing downturn and credit crunch. Despite having less money to work with, Gov. Charlie Crist and state legislative leaders presented a series of general goals to bolster business growth during a summit for business editors this week.
More specifics will come out when the governor presents his budget recommendations in February, according to Dale Brill, director of the Governor's Office of Tourism, Trade and Economic Development.
Any funding for economic development would have to come while the Legislature is faced with cutting $2 billion to $3 billion, while 91 percent of the budget is devoted to schools, health care and the legal system, all of which are increasing in costs, according to Glenn Robertson, former state budget director under Gov. Bob Graham.
The Republican leadership is backing the Jan. 29 property tax vote as a way to stimulate the economy by increasing the homestead exemption, giving homeowners more spending money and making the Save Our Homes cap on homesteaded property portable to spur home sales. The exemption would apply to all but the school budget share of the third $25,000 in value, an average of about $15,000 in additional savings.
Meantime, a University of Georgia study predicts the amendment would be overthrown as an unconstitutional burden on new businesses and residents.
Given a usual time frame of five years to settle in court, Robertson said Thursday the state would have to reimburse taxpayers $9.3 billion in overpayments. He also said it is possible the lawsuit could go back to the beginning of the current Save Our Homes cap set in 1995 for billions more in reimbursements.
Dominic Calabro of Florida TaxWatch said there is nothing in the amendment to keep local governments from recouping lost revenues with increased property tax rates or fees.
He also said Save Our Homes has unintentionally kept taxpayers from getting more involved as their local governments increased spending by nearly 20 percent as their taxes only went up 3 percent by shifting the burden to businesses, snowbirds and second-home owners.
The Florida Home Builders Association is advocating the tax amendment as a tax cut to stimulate home sales, which would lead to further economic activity.
"It's not perfect, but it's all we've got," said David Hart, vice president of legislative and government affairs for the association.
University of Florida research economist David Denslow said an increasing income disparity, baby boomers retiring in large numbers and Florida home prices doubling in six years have led to more affluent retirees moving to the state while low- to middle-income retirees and families are locating to other Southeastern states or leaving Florida.
One clue to that is that school enrollment has declined even while the state's total population grows, Denslow said.
Denslow predicted a 70 percent chance that Florida and the nation will head into a recession, defined as consecutive quarters of negative growth in gross domestic product.
That would mean lost jobs, further housing declines and more foreclosures, he said.
The effects of a recession would be delayed in university towns until the Legislature alters funding in reaction to the economy, Denslow said, although community colleges would see a surge in enrollment as the newly unemployed seek new skills.
Anthony Clark can be reached at 352-374-5094 or email@example.com.
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