Budget cuts won't fix a creaking tax system

Until Gov. Charlie Crist and the Florida Legislature acknowledge reality, this state's future will be awfully bleak. The cost to maintain the status quo in public education, universities, social services, transportation and other areas - forget about improvements - is too much for the antiquated tax system to handle. The latest evidence is in the struggle to cut more than $1-billion from the current state budget and in the larger shortfalls projected for the next several years.

To the governor's credit, he put specific budget cuts on the table while legislative leaders negotiated in private and put off a special session because they couldn't agree on an approach. It's good to see Crist finally come up with a specific plan on something instead of ceding the details to lawmakers and then declaring victory even when there isn't one. That might flush the budget-cutting debate among legislators into the open, which is where it should have been all along.

Crist relies on familiar strategies to minimize the impact of the spending cuts and pump up a slumping economy. He spares public schools and other priorities in part by diverting money from trust funds, an old trick that can backfire because it uses one-time money to cover recurring expenses and creates a deeper hole in the future. He avoids inflicting pain on social service recipients by reducing increases in reimbursement rates to Medicaid providers. He speeds up public spending on affordable housing, transportation and other public construction to stimulate an economy hit hard by the real estate slump.

The governor's line-by-line list offers a window into his priorities and the lengths he will go to in order to avoid harder choices or raise revenue. His cuts would hit universities particularly hard, yet he still is unwilling to consider a 5 percent tuition increase or accept a recommendation by his corrections secretary to save money by releasing early some of the least risky inmates. He wins praise for calling for more spending on roads, but he would borrow the money while diverting millions of tax dollars from transportation to fill other holes. That's a pretty neat trick, and it's short-sighted.

Meanwhile, lawmakers are deadlocked in a fight that appears to be whether to target the cuts as the House wants or spread them evenly over education, transportation and other areas as the Senate wants. Of course, targeted cuts are preferable. But the real issue here is whether to spare public schools at the expense of other programs as the House proposes or cut some $400-million from per student public school spending as the Senate suggests. That still would leave public schools with a 4.5 percent spending increase this year, much of which goes to reducing class sizes. While it might make sense fiscally, politically it will be a hard argument to make when the governor can boast of sparing public schools without explaining the cost to other priorities.

The sad fact is that this is only the beginning of a nasty fight that pits public schools against transportation, or public schools against universities, or social services against everybody else. Now the challenge is to cut $1-billion from the $72-billion budget. Next year, a new state financial report says, there will be a $2.3-billion budget gap. The year after that, the gap grows to $2.8-billion. The year after that, it grows to $3-billion.

Budgets can always be tightened, but cutting spending cannot be the only answer to these challenges. Crist's musings, which include selling off the state lottery or some highways and increasing gambling opportunities on Indian reservations, won't secure Florida's long-term future, either. Raising revenue, closing exemptions and creating a tax system that is broader and fairer has to be part of the discussion. Agreeing to a modest 5 percent tuition increase for universities would be the first step in the right direction.

[Last modified September 8, 2007, 23:20:17]