Report: Florida’s revenue, spending face grim future

“In a lot of ways,” says one of the report’s authors, “the state of Florida is really near the bottom of the barrel.”

02/20/2014 12:06 PM

02/20/2014 11:48 PM

A new report released by the LeRoy Collins Institute on Thursday concludes that Florida is falling behind not only the rest of the country but also in the South in key areas from teacher salaries to high-wage jobs to adequate roads.

“The news is grim,” says the report, “Tougher Choices: Shaping Florida’s Future.”

It was written by two academics at the University of Florida, Drs. David Denslow and James Dewey, along with UF’s Bureau of Economic and Business Research.

“In a lot of ways,” Dewey said, “the state of Florida is really near the bottom of the barrel.”

The report “examines the past and predicts a future in state revenues, demographics, the Florida Retirement System, K-12 education, higher education and infrastructure (particularly transportation).” Among the findings:

• The Florida Retirement System, the pension fund for hundreds of thousands of public employees, is a “model” for other states. Sound and strong, it is threatened by the Legislature’s contemplation of requiring new entrants to join a defined contribution plan.
• Teacher salaries in Florida declined at the fourth fastest rate among states between 2000 and 2012, and it will be difficult to make significant progress “without increasing tax rates, however unlikely that might be.”
• Gas taxes, the principal funding source for transportation, continue to erode because they are not indexed for inflation and the popularity of energy-efficient cars means people are buying less gasoline.
• Florida’s lack of a personal income tax results in a heavy reliance on the 6 percent statewide sales tax and property taxes, and property taxes fall heaviest on businesses.

The researchers said one way to change the direction of the state would be to increase the sales tax to 7 percent.

“It would be better if we had a broader tax base, but we don’t,” Dewey said.

As the report notes at the outset, the Collins Institute seeks to honor the legacy of Collins, a “courageous and visionary governor” and a Democrat who served from 1955 to 1961.

The new report is an updated version of the institute’s “Tough Choices” report published in 2005.

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