Sage advice worked once, but will we listen again?By C.T. BOWEN
© St. Petersburg Times
published February 3, 2002
E.F. Hutton meet Henry Fishkind.
We're all familiar with Hutton's television commercials that featured a hushed crowd, leaning forward to better hear potential financial advice as an off-camera voice said, "When E.F. Hutton talks, people listen."
Fishkind gets similar, though not as dramatic, treatment in local circles. Deservedly so. More than 15 years ago, the Orlando-based economic consultant helped persuade county government types that Pasco could borrow money cheaply to begin significant capital improvements.
John Gallagher, new to the job as county administrator, didn't buy in right away. For the most part, Pasco had a pay-as-you-go mentality that had left a close-to-capacity landfill, crowded roads, abundant septic systems, few parks and even fewer libraries.
"Pasco County had never really borrowed that much money. We didn't have a bad bond rating, we just had a flat rating," Gallagher said, because the county had little credit history.
And after persuading Gallagher, Fishkind and others traveled to New York with county officials to tout Pasco's potential to Wall Street. It helped increase the county's bond rating which made it easier to borrow money.
The result? During a five-year stretch beginning in the late 1980s, the county borrowed more than $200-million to build roads, parks and libraries, expand its central water and sewer system and construct a trash incinerator. It used higher gasoline taxes, voter approved property taxes, more expensive utility rates and an annual assessment to pay down the various debts.
Try getting all that done in these days of no-new-taxes demagoguery.
Which brings us back to Fishkind. He advises, among others, Gov. Jeb Bush and is a consultant to Florida's Senate on tax reform. Thursday, he brought his economic forecast to Pasco County as part of business development week. Details can be found at www.Fishkind.com.
Among the highlights:
Pasco's post-Sept. 11 economy will fare better than Florida destinations that rely heavily on tourists who travel by plane. Pasco's visitors are seasonal and drive here from the North.
(Still, there are statistics to show Pasco is not immune. Last month, the county reported tourist tax collections brought in $59,184 in September and October, less than half of the $131,500 collected for the same two months in 2000.)
Increasing the Social Security retirement age means more people coming to Florida will continue to work. As a result, they'll want low-maintenance, resort-like housing. Builders that recognize the trend and provide that product will flourish.
Pasco is affected by the economy of its neighbors. In Hillsborough County, developers built too much office space. In Pinellas, more jobs have been crated, but the county doesn't have the residential growth to match.
What does that mean for Pasco? For one, it explains west Pasco as a bedroom community for Pinellas County employment. Countywide, 50,000 people live in Pasco, but drive to another county to work each day. Attracting employment opportunities beyond the service industry to Pasco is the challenge to local industrial recruiters.
But, the overbuilding in Hillsborough means there won't be an office space boom in Pasco anytime soon. First, developers need to rent their vacant space in Tampa before looking for new sites.
The same day Fishkind spoke to 80 people at Trinity, the Florida Senate approved the tax reform package to cut the state sales tax from 6 to 4.5 percent and to remove most of the exemptions.
Fishkind's thoughts on tax reform are clear. Florida has not focused on investing in its infrastructure. The idea to link future growth to school capacity stalled in Tallahassee last year as soon as everyone realized a significant price tag would be attached.
In the meantime, the Sept. 11 attacks have brought the longest and largest decline in air passengers to Florida since the Arab oil embargo. Fewer tourists mean less sales tax revenue for the state. State revenue estimates soon to be released will forecast calling for a $600-million decline over last year, he said.
That translates to cuts in education, health care and criminal justice. And, the elimination of the federal estate tax in 2004 will cost Florida another $1-billion annually.
The state can recognize the shortcomings of its antiquated tax structure and change it, or it can do what it has always done, Fishkind said, "stick its head in the sand and raise the sales tax rate."
Afterward, I asked Fishkind about the prospects for a local government to approve its own sales tax in 2002. Absent the political consideration -- the tax reform debate in Tallahassee and local re-election campaigns -- there is no economic reason to keep the measure off the November ballot. Collection of the tax wouldn't begin until 2003, at the same time Fishkind predicts the economic rebound will be complete and sustained for a period of six to eight years.
Among other things, he pointed to new unemployment claims peaking in October, stable mortgage rates, and a political climate that will demand inflationary controls because aging baby boomers are saving for retirement as resons for his economic optimism.
Still, you couldn't help but wonder. Are people really moving closer to better hear this advice?
Or just leaning forward to plop their heads in the sand again.
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