Scott economic agenda continues to rely on tax cuts and budget cuts
This week, Gov. Rick Scott has begun unveiling his plans to grow Florida’s sputtering economy, a blueprint that continues to rely heavily on tax cuts and budget cuts.
According to recent budget projections, the state Legislature may be facing a $2 billion shortfall during its next legislative session. The shortfall comes despite austere statewide budget cuts that have left social programs for low-income and at-risk families with limited resources and growing demand. Scott had previously anticipated a $1 billion-plus budget surplus.
Scott’s prepared remarks on his “2012 Job Creation and Economic Growth Agenda,” released today, focuses on what he describes as creating “a tax environment that welcomes business growth and encourages investment in our state.”
Much like his previous agenda, he plans to continue working toward eliminating the corporate income taxes for big businesses.
Scott said in his remarks today:
Last year, by passing an exemption for businesses that owe up to $25,000 in corporate income taxes, we were able to eliminate nearly half of all the companies obligated to pay the tax. To continue to fulfill my promise to eliminate the corporate income tax in seven years, I am further proposing to reduce the number of remaining companies required to pay this tax by twenty-five percent. We’ll do it by increasing the corporate income tax exemption from $25,000 to $50,000. The eventual elimination of the corporate income tax will eliminate a major barrier preventing Florida from attracting future Fortune 100, Fortune 500 and other growing companies that can get our residents back to work.
Alan Stonecipher, research analyst and communications director for the Florida Center for Fiscal and Economic Policy, says this method of attempting to grow the economy is “unfair” and ultimately bad economic policy that is very “short-sighted.”
“When the government spends money on people, it gets circulated in the economy,” Stonecipher explains. “That’s what Florida needs. This emphasis on cutting taxes does nothing for job growth.”
Stonecipher tells The Florida Independent that Florida’s economic policy has revolved around myths about the supposed tax burdens on businesses in the state of Florida. He says “businesses here are paralyzed, not overtaxed.”
Eliminating the corporate income tax in the state would remove about $2 billion from the state’s general revenue — 9 percent of the state’s general revenue, according to Stonecipher.
“It’s a ludicrous approach,” he says. “This will move directly onto the backs of lower- and middle-income people in the state, which will make the system even more unfair.”
This year, millions of dollars were cut from public programs that provide services to low-income families. Health services for women and children, in particular, took a big hit. The education system also lost money. State health department and local health departments all over Florida lost millions of dollars for their services, which led to the loss of hundreds of state jobs.
A policy research group reported that the state actually made unnecessarily austere and harmful budget cuts this past year. Economists have also said that severe cuts to state budgets, like in Florida, are “a big part of why the economy is back at risk.” Because of the decreased spending in states, economists warn there is an increased risk of another recession.
Scott argues that the amount of money collected with the current tax structure is enough to provide the services the state needs.
According to his prepared remarks:
Florida’s existing tax structure and revenue is sufficient to satisfy the basic mission of Florida government: that of providing an adequate and fair system of education, the provision of health and human services for our most vulnerable, and a system of incarceration for those that do harm to others. Unlike the federal government, which simply borrows more money as the level of income is reduced during difficult economic times, Florida must conduct themselves as everyday families and businesses do with their own budgets—by reducing spending and living within their means.
According to a recent poll, a majority of Florida voters feel that Scott’s budget was “unfair to people like them” and “do not approve of his handling of the state budget.”