About six weeks ago, Rahm Emanuel, Barack Obama’s chief-of-staff designate, spoke to a Wall Street Journal-sponsored gathering of CEOs. Among Emanuel’s economic observations, this piece of ironic pragmatism: “You never want a serious crisis to go to waste. This crisis provides the opportunity for us to do things that you could not do before.”
Indeed. Everything — from massive stimulus packages to massively controversial bailouts — is on the table. Familiar touchstones — from Adam Smith and Ronald Reagan to Gordon Gecko and Alan Greenspan – no longer counsel or console. Gospel is out; bold is in.
Which brings us to Florida, where a $2.3-billion 2008-09 budget hole – that could deepen to $3.8 billion or more in 2009-10 – has been awaiting this week’s special legislative session.
Alas, the only thing remotely special about the session so far is the announcement that House Speaker Ray “The Funnel” Sansom will actually step down from his ethically-challenged position with Northwest Florida State College.
Unless, of course, you want to define “special” as inexplicable indifference to the budget “opportunity” presented. An opportunity to finally reconcile Florida’s revenue-raising formula with reality. An opportunity to finally think outside the financial pox. An opportunity to overhaul Florida’s tax system that hasn’t changed appreciably since LeRoy Collins was governor.
Put it this way. When rapidly ratcheting population growth largely insulated this state from recession, the old paradigm of a sales tax-skewed revenue system sufficed for the short term. It was, of course, the only term that mattered politically. But now that growth has flatlined, that system is insufficient. Woefully so.
You would think a responsible state Legislature — even a reasonably irresponsible one — would have noted as much. At least in a “special” session.
Because of the state constitution that prohibits deficit spending, Keynesian solutions are precluded. And that, we are told by the Republican-dominated Legislature, leaves only borrowing and spending options to address burgeoning budget deficits. And that, in effect, means cutting services – at a time when Florida leads the country in food stamp requests — and jobs — during a recession. It also means raiding trust funds and employing accounting sleight of hand.
Alternatives are obvious to all not wearing ideological tax blinders.
Start with the easy stuff. It would be expedient if the Legislature would stop pouting about being a “rubber stamp” and finally approve the gambling compact with the Seminole Tribe of Florida and then get on with adding that $1 to the paltry (33.9-cent) state tax on cigarettes. Voluntary taxes should always be on the table, especially during a serious economic downturn. Especially those that could (combined) net the state nearly $1 billion annually.
Interestingly, Florida Chief Financial Officer Alex Sink has been the only one with any clout willing to state the obvious. “Every sales tax exemption ought to be back on the table,” proclaimed Sink.
Perhaps Sink could use Gov. Charlie Crist’s unused bully pulpit to better make the case for realistically addressing the deficit(s). It would include scrutinizing general sales tax (6 per cent) exemptions, including services, as well as taking the initiative to involve Florida in the concerted regional effort to collect sales taxes on catalogue and Internet sales.
And if having the cebollas to make such proclamations makes Sink look, well, gubernatorial, good for her. Perhaps “the people’s governor” will take note – as well as notes.
Florida can no longer afford populist piffle for leadership and ad hoc band aids for an economic strategy when confronted by a crisis of unprecedented proportion. Playing the tax-exemption, loopholier-than-thou game is a loser.
But it’s what Florida gets by letting “a serious crisis go to waste.”