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Next governor should be ready to make tough choices

By HOWARD TROXLER
Published January 10, 2006

Roughly half of our state budget in Florida is now eaten up by two things: Medicaid and education for grades K-12.

Everything else that we expect a state to do is jammed into the other half - roads, prisons, universities, environmental protection.

It's going to get worse. K-12 education and Medicaid are going to keep growing faster than the other stuff and take up a bigger piece of the pie.

But at the same time, Florida is about to enter into a relatively lean stretch. Smart folks predict a slowdown in the growth of Florida's tax collections over the next five years.

Costs growing faster. Money growing slower. Bad combination.

This is the gist of a recent report from the Leroy Collins Institute, a think tank in Tallahassee (think tanks always hate to be called "think tanks") named for the late, great former governor.

The report is titled Tough Choices: Facing Florida's Revenue Shortfall. You can read either a summary or the full report at http://www.fsu.edu/collins/

This is a pretty interesting report for several reasons. The first is that it is not just another liberal cry for raising taxes. (The chairman of the institute, Curt Kiser, is a former Republican state legislator from Pinellas County.)

In fact, the report says that Florida's tax structure, which relies mostly on a tax on retail sales, is "not fundamentally flawed." That conclusion runs counter to every tax-reform campaign in Florida of the past three decades.

Neither, the report warns, should Florida adopt a "soak business" strategy to raise revenue. "We also agree with some conservative commentators," the report notes, "that a number of Florida's business taxes are high enough already."

What are we supposed to do, then? There is no one simple answer, but the report makes several recommendations, including three fairly controversial ideas:

--Easing up on the class-size amendment passed by Florida voters in 2002, which is costing about $2-billion a year to put in place.

--Putting new construction on the tax rolls sooner, instead of waiting for the next tax year.

--Taxing Internet sales.

Even so, that wouldn't be enough. Hence the title of the report - Florida has to make tough choices in the next few years. The cost of Medicaid grew 13.7 percent last year. School enrollment is growing by 50,000 a year, and it's costing several hundred million dollars extra each year just to stay even.

Oh, and by the way, none of this fixes the fact we aren't replacing old roads or building enough new ones fast enough. Or that the public schools rank as low as they do. Our university system is among the lowest in the nation when it comes to state support or tuition - and must handle future demands from two sacred-cow programs, the Bright Futures scholarships and prepaid tuition.

I asked Gov. Jeb Bush what he thought about the Collins Center report. To me, it validates Bush's emphasis in two key areas: the class-size amendment and Medicaid reform.

Bush replied he agrees that Florida's existing tax base is adequate. "Our problem is overspending," he said. "And class size and Medicaid are the future and current problems.

"We can solve both and free up money for infrastructure, helping the vulnerable and enhancing education achievement," Bush said. "Fortunately, we have the highest reserves of any state and a triple A bond rating. We have proven we can deal with contingencies - like eight hurricanes in two years."

This is the answer of a governor who just entered his eighth year in office, and who has had to produce balanced state budgets despite end-of-the-world predictions: We must try to cut here and there, and we will do what we can.

It also is the answer of a governor who will not be around if the crunch foreseen by the Collins Center comes to pass. No matter who is our next governor - Republican Tom Gallagher or Charlie Crist, or Democrat Jim Davis or Rod Smith - this will be a principal challenge of his first term, and ought to be a principal theme of the debate among them for the rest of this election year.

[Last modified January 10, 2006, 01:51:15]