Tax and Fee Breaks Remain Popular in the Legislature
April 15, 2010

In two previous reports, FCFEP noted that the Florida Legislature is considering about $700 million in tax breaks for the coming year.  Included were such items as cutting the corporate income tax, limiting the amount of sales tax charged on the purchase of boats and airplanes, and exempting sales of tickets to all-star sporting events in Florida from the sales tax.

Another bill moving in the Senate (SB 2036) would roll back the motor vehicle and license fees increased by the legislature last year.  Returning those fees to the 2009 level would reduce general tax revenue by $398.5 million — and bring the total of all tax cuts being considered to about $1 billion.

Most of the tax breaks hopefully won't be signed into law, as the legislature weighs the merits of the bills and the implications to the budget.  But the proposals illustrate how lawmakers sometimes use tax preferences, which cost the state treasury money just as direct appropriations do.

As FCFEP said previously, “Establishing more tax breaks instead of reducing their number will increase the need to cut the budget and will not improve the state’s economy or create jobs in the short term, if at all.”  (Read the reports here and here.)

 

Tags: tax | budget | spending
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Legislature to Schools: Do More With Less State Money
April 12, 2010

The furor over the merit-pay-for-teachers bill sent by the legislature to the governor for his signature (or veto) occurs in the context of a long battle over the level of funding for education in Florida.

For more than a decade, governors and legislators have enacted a series of education policy changes focused on the FCAT and various accountability systems designed to hold educators' feet to the fire to make sure that "no child (is) left behind." 

Educators and others counter that it's the legislature that hasn't been accountable, failing to fulfill this guarantee in the Florida Constitution: 

"Adequate provision shall be made by law for a uniform, efficient, safe, secure, and high quality system of free public schools that allows students to obtain a high quality education...."

When the people of Florida have spoken directly about public schools in the last decade, they have twice voted to require the legislature to spend more to make schools high-quality (approving constitutional amendments for a universal voluntary prekindergarten program and a major reduction in class sizes). 

The legislature has been finding it difficult to do what the voters required (and to maintain adequate levels of funding for other vital state services) and is relying heavily on temporary federal stimulus money to make ends meet.

SB6 links teacher pay to outcomes on standardized tests, some of which aren't developed yet.  And it requires local school boards to set aside 5 percent of existing funds to make the necessary changes.  In other words, it requires school systems to do more with the same amount of funding--an "unfunded mandate" from the state to school boards. 

The long, deep national recession makes the task difficult for the legislature, of course--particularly when it refuses to close any tax loopholes or considers adding more.  But declining revenue also makes it even harder for teachers, school administrators, and school boards to do their jobs.

When considering how well the legislature has funded public schools in Florida, here's a useful measure: 

In the 1998-99 school year, 52 percent of all government funding for public schools in Florida came from the state.  Local school boards provided almost 41 percent, and federal funds less than 8 percent.

In 2007-08, the state and local shares had reversed.  State funding had fallen to 40 percent of all public school spending while local revenue climbed to 51 percent.  

For those dissatisfied with property taxes, there's one reason.  The legislature provides less state money to schools while requiring local school boards to provide more.

 

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Are Florida’s Private Prisons Cheaper or Better?
April 12, 2010

FCFEP's study of private prisons in Florida, released last week, led to two conclusions:  there is little evidence that private facilities either save taxpayers' money (as required by law) or rehabilitate prisoners any better than public prisons.

Over the past two decades, states have begun to contract with private companies to provide a number of services that had traditionally been government functions performed by public employees.  Privatization proponents argue that a free-market, competitive approach to providing some services would result be less expensive and more effective.

In the case of running prisons, at least, there's no compelling evidence that the private sector in Florida does the job any better than the Florida Department of Corrections.  That finding raises questions about the benefits of privatization of other functions of state government.

 

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