Tag: budget

"Slackers?" In Truth, Few Jobs Exist for the Jobless
January 13, 2011

Governor Rick Scott’s economic development transition team and some legislators have complained recently that Florida’s unemployed workers don’t look hard enough to find a job.  The transition team cited a study that was misused, its author said.  Now two new reports indicate just how difficult it is for the unemployed to find a new job.

Nationally, the U.S. Department of Labor reported, there were 4.6 jobless workers for every job available in November.  That’s three times more competitors for each job opening than there were in early 2007, when Florida employment began a long slide that resulted in more than one million jobless.

Nevertheless, legislators worried this week about jobless Floridians milking the unemployment insurance (UI) system.  (See “Florida senators target couch potatoes inflating state unemployment rate,” January 11, St. Petersburg Times.)

One state senator asked the state agency overseeing unemployment compensation to "distinguish between those who can't get off the couch ... and those who won't get off the couch" to hunt for jobs.  Another senator wanted to make sure the state eliminated “slackers and malingerers” who enjoy a “lifestyle” of receiving unemployment benefits without trying to work.

But the difficulty of job-seeking was illustrated in a report by Forbes.com that lists three Florida cities – Orlando, Jacksonville, and Miami – as among the 10 worst job markets in the nation.  The list was created using unemployment rates, JuJu.com’s monthly Job Search Difficulty Index for Major Cities, and analysis by Moody's Economy.com.

It’s not as if Florida’s unemployed are living it up.  The maximum weekly benefit for an unemployed worker is $275 a week, lower than all but three states.  Less than half of the unemployed even qualify for benefits because of Florida’s antiquated UI system. 

Furthermore, Florida’s UI system is among the cheapest in the nation for employers.  Only the first $7,000 of a worker’s salary is taxable to the employer – lowest in the nation.  Even after unemployment tax increases this year to strengthen the unemployment insurance trust fund, the maximum tax on Florida employers per worker ($378 annually) will be among the lowest of the 51 states and District of Columbia.

Even so, the new administration and some legislators want to “reform” the system as part of efforts to make Florida the most business-friendly state in the nation.

The American UI system was created in 1935 as a response to the Great Depression, when millions of jobless workers and their families suffered.  Without wages, they couldn’t buy goods and services, leading to more layoffs and a collapse in economic activity.

The system remains vital today not only to the more than one million Floridians and their families who receive payments, but also to thousands of businesses where the unemployed spend their benefits on products and services. 

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Lower Budget Gap Due in Part to Previous Program Cuts
September 15, 2010

Floridians can rightly cheer the news that the anticipated budget gap facing the new governor and legislature next year will be only $2.5 billion, instead of the $5.5 billion state economists had predicted earlier.  It means, in part, that the state’s economy is recovering enough that revenues from the sales tax and other taxes are growing more than expected.

But the good news masks the fact that the improved outlook also depends partly on $1.5 billion in cuts made by the 2010 legislature – and that more budget cuts will be on the agenda for 2011.

This means that the next budget will be built on an already-reduced base.  Those 2010 reductions will become permanent unless the legislature adds back the cut money in future years.  

Sometimes budget cuts might conceivably be characterized as “efficiencies.”  But after several years of cuts during the economic downturn, even the projected new speaker of the House of Representatives warns that there’s not a “waste, fraud, and abuse” line item that can be wiped out to balance the budget.

State economists provide a list of 26 Critical Needs that the next budget should fund and 29 Other High Priority Needs that the state normally pays for.  “Critical Needs can be thought of as the absolute minimum the state must do absent significant law or structural changes, and Other High Priority Needs in combination with the Critical Needs form a highly conservative continuation budget,” state economists wrote.

The list (see it here on Page 67) includes replacing federal stimulus funds for public schools, keeping up with Medicaid growth, paying for health insurance for uninsured children, providing services to Floridians with disabilities and those served in programs of the Department of Children and Families, and paying for new students enrolled in state colleges and universities.

These needs are among those that bear watching in the 2011 legislative session.  The options for closing a budget gap of $2.5 billion are limited:  modernizing Florida's tax structure by asking everyone to pay their fair share (which many political leaders say will not be considered); imposing fee increases on those already paying; or more cuts to services, perhaps to some on the list.

 

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Pro Sports Subsidies From State Taxes Continue While Services Get Squeezed
August 30, 2010

Add Florida taxpayers to the list of those subsidizing profitable major league baseball franchises in Miami and St. Petersburg, even if most Floridians don’t realize it.

Financial documents leaked this week show that both the Florida Marlins and the Tampa Bay Rays turned profits in recent years even as they insisted that local taxpayers finance new stadiums.  (Read news stories about their profitability here and here.)

In the Marlins’ case, the cost to local taxpayers for “a sweetheart stadium deal” will be $2 billion or more to repay bonds over 40 years.  The Rays also say they need a new stadium financed in part by local taxpayer subsidies.  Both teams let it be known that they might move to another city if new stadium arrangements weren’t satisfactory.

Meanwhile, thanks to a Florida law enacted in 1991 to subsidize a "new or retained professional sports franchise," the Marlins, Rays, and six other professional sports franchises each receive a check from the state every month for $166,667.  That’s $2 million a year for each team, for 30 years.

Together with $5 million in subsidies for major league teams based in Florida for spring training, these subsidies from state money cost $21 million each year, straight from collections from the sales tax.  In addition, Florida provides a $2 million annual subsidy to the Professional Golf Hall of Fame and $1 million annually to the International Game Fish Association World Center. 

The Marlins, Rays, and other baseball, football, basketball and hockey teams subsidized by Florida taxpayers are each worth hundreds of millions of dollars, according to annual sports franchise valuations by forbes.com: 

Florida Marlins                                  $317 million

Tampa Bay Rays                              $316 million

Jacksonville Jaguars                         $725 million

Tampa Bay Lightning                        $191 million

Florida Panthers                               $159 million

Tampa Bay Buccaneers                    $1 billion

Miami Heat                                       $364 million

Orlando Magic                                  $361 million

In just the last five tough budget years, Florida’s taxpayers will have subsidized these profitable pro sports teams with more than $100 million.  This money leaves the state treasury month by month and is not available to fund priorities like education, health care and health insurance, and other services needed by those caught in the economic downturn.

Subsidies for professional sports teams fall under the guise of “economic development,” where tax revenues are handed out with the rationale that they will create jobs and other positive economic outcomes.  The $21 million annual subsidy to sports teams is one of hundreds of tax breaks in Florida law, costing billions each year, which are seldom if ever reviewed.

Supporters maintain that the state can’t change the 1991 law to eliminate the subsidies because the money supports bonds sold to finance pro sports stadiums.  Other money could be substituted, however, if legislators decided that the Florida had more important priorities.

Many tax breaks merely provide government subsidies to profitable businesses or provide money to employers who would have hired new workers anyway.  (See “Tax Breaks Shift Money to a Few Winners and Compete for Limited State Revenue.”) 

Sport subsidies are opposed by most economists.  “There appears to be little or no evidence for any net beneficial economic impact of public stadium financing,” concluded an economist’s study for the James Madison Institute in Tallahassee.

An examination of a multitude of national studies on tax breaks for sports teams reached the same conclusion.  “Sports subsidies cannot be justified on the grounds of local economic development, income growth or job creation.”

“The fact that sports subsidies continue to be granted, despite the overwhelming preponderance of evidence that no tangible economic benefits are generated by these heavily subsidized professional sports facilities, remains a puzzle,” said the authors of the study for the International Association of Sports Economists.

Part of the explanation may be “simple collective foolishness when it comes to matters of the heart like sports,” the economists said.

One former owner of the NFL’s Philadelphia Eagles, Norman Braman of Miami, drew his own conclusion when talking to the Miami Herald about the Marlins’ profitability while the team sought taxpayer subsidies.

“The taxpayers are stuck with paying [the money for the stadium] back.  It shows [the Marlins] should have built the thing themselves.  It shows the taxpayers are a bunch of suckers.”

 

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