By: Scott Maxwell | Orlando Sentinel
With the coronavirus crisis pummeling Florida’s budget, debates have already started about how lawmakers should patch the financial holes.
Should they scrap long-overdue teacher raises?
Or should they raid the state’s affordable housing fund?
No and no. Neither one.
In fact, I’m going to submit that anyone who starts the discussion by asking you which valuable service you want to cut is offering you a false choice within a bogus framework.
Lawmakers don’t have to cut any of that. Instead, they can just stop giving away the farm to corporations.
Just look at the numbers. Two months ago, Gov. Ron DeSantis agreed to give corporations another $543 million in tax refunds approved by the Legislature.
That was more than enough to fund the entire $500 million plan for teacher raises.
These guys knew darn well that a financial storm was looming. A March 25 headline in the Sentinel was clear as day: “As Florida’s economy crashes, DeSantis says he’s going ahead with $543 million in tax refunds for corporations.”
Yet now we’re reading stories about how teachers might need to make sacrifices?
Or the working poor?
What irresponsible nonsense.
Yet this nonsense is part of a longstanding policy trend in Florida: Let corporations skate on taxes. And then try make up the difference by asking individual taxpayers to bear a higher tax burden … and by shortchanging everything from education to mental health.
That’s right, we’re talking budgets and taxes today — something that can seem dreadfully dull. Believe me, I get it. Heck, when I just now typed the phrase “tax burden,” it felt like I was offering you a verbal dose of Zzzquil.
But this stuff is important. These are the policy issues that help explain everything from why your child’s school can’t find enough teachers to why you face more miles of toll roads than drivers in any other state in America.
See, it’s all just basic math. If the state collects less from corporations, it either has to collect more from you, provide fewer services or both.
Florida collects corporate taxes from only 1% of businesses in this state — and gives big breaks to many of the out-of-state companies that do pay taxes.
That may be good news for Mastercard, Circle K and NBCUniversal — and the reason the Tax Foundation says Florida has the fourth-lowest “tax climate” for businesses.
But it’s also part of the reason you pay one of the 10 highest gas taxes in and face the highest number of toll roads in America.
See, the money still has to come from somewhere.
But even after tapping your wallet, Florida still doesn’t collect enough money to pay for everything citizens need. So services suffer.
That’s why Florida ranks near the bottom in mental-health spending, why children with profound disabilities have to get on years-long waiting lists for help and why lawmakers keep raiding the state’s affordable-housing trust fund to make ends meet.
It’s also why teacher pay in Florida ranks 46th in America, prompting teachers to flee the state and leave thousands of classrooms without full-time instructors each year.
So let’s recap:
Corporations pay very little.
Teachers get paid very little.
And now we’re talking about going after the teachers?
It makes more sense for Florida to close corporate tax loopholes and set collection rates closer to the national average.
That would do three things:
1) Reduce the tax burden on individual taxpayers. (That’s you.)
2) Provide more money for needed services. (Those are the things like your kids’ school and toll-free roads.)
3) Provide a more reliable tax base.
That last one is important, because it explains why Florida is in such a bad way right now. More than 75% of the state’s general revenue comes from sales taxes, making our budget abnormally susceptible to recessions.
The heavy reliance on sales taxes is also incredibly regressive, taking a heavier toll on poor families than wealthy ones.
How so? Let’s say the average family buys one tank of gas a week. Well, if your household income is $45,000, the taxes on those 52 tanks a year constitutes a much higher percentage of your annual income than it does for a family earning $250,000.
In fact, the Institute on Taxation and Economic Policy found that Florida families that make less than $50,000 spend 8-12% of their annual income on local and state taxes while families that make $200,000 or more spend between 2% and 4.5%.
And don’t let anyone con you into believing that low corporate taxes have made Florida some kind of economic utopia.
Florida trails most of America in everything from median wages to Fortune 500 headquarters.
What we have here are a bunch of lousy-paying jobs that send profits to headquarters in other states.
The only thing that trickles down is the tax burden … onto you.
Listen, there are many ways lawmakers could level the playing field and provide needed revenues — including ending the tax breaks highlighted in the Sentinel’s “Big Profits, Tiny Taxes” series that showed how Florida lets corporations skate.
Target those profits before targeting teachers and affordable housing.
Lawmakers shouldn’t cut basic services until they first ensure big corporations are paying their basic share.
Article last accessed on May 25, 2020 here. A print-ready version is available here.