DeFede Columns

TALLAHASSEE (CBS4) ― For several days I've been trying to write this column regarding the special legislative session taking place in Tallahassee. State revenues are off leaving the state with a $2 billion hole in this year's budget that they need to fill immediately. And projections are there will be another $4 billion gap in the 2009-2010 budget that the Legislature will have to address when it convenes for its regular session in a couple of months.

I've spent the week talking to Republicans and Democrats and with each conversation I fall deeper and deeper into a depression – much like the state of Florida's economy.

Initially I thought I would try to outline the cuts to education, the cuts to social services, and the cuts to seniors. But it seems almost futile. The pain is here, it is not going away.

Last year I tried to document every proposal, every cut – and I'm sure I will again – but for now I'm just tired and frustrated.

Last year, the state's Taxation and Budget Reform Commission (TBRC) met, as they are bound by law, to review the state's system of collecting and allocating money. This commission meets once every 20 years and is supposed to be immune from politics. It was envisioned to fly above the partisan wrangling and offer long-term vision. It was designed to make choices that a politician running for office could never make. The TBRC could be bold because its existence was finite and its members untouchable.

If ever there was a time or a need for reviewing the state's taxation and budget policies, it was last year.

Everyone is angry and appalled by the Madoff scandal and his $50 billion pyramid scheme. Well I've said this for years; Florida's budget is a giant pyramid scheme.

A pyramid scheme is based on a simple premise. Old investors are paid off with the proceeds of new investors, who in turn will be paid with the money contributed by future investors. In order for the pyramid to stay intact, it needs to be ever growing. Its base needs to keep getting larger and larger with more and more people coming in.

That is exactly the way Florida's economy has worked. Our economy has always been based on growth and the belief that people will always want to move here. More people means more taxpayers, more taxpayers mean more taxes collected.

We induced people to come here by promising them no state income tax. We capped the amount that can be collected through sales tax. We offered huge tax breaks to corporations to get them to move here or to keep them from leaving.

We gambled everything on property taxes, and even then we placed limits on homesteaded property. We created one of the lowest taxed states in the country believing that wherever taxes are low people will follow.

But low taxes means poorly funded grade schools and high schools and universities. It means millions of children without health insurance and overcrowded emergency rooms. Low taxes mean fire stations don't get built and parks and libraries close early, and waiting lists grow for senior citizens to receive meals or services they are entitled to.

And eventually a strange thing happens. People outside of Florida begin to take notice that the quality of life in Florida isn't so great. They realize that even if the taxes are low, it may not be such a great place to move a family or relocate a business or settle into retirement.

People don't move to Florida as they once did. Couple that with the collapse of the housing market – after all, if people aren't moving here, who's going to buy all those condos and houses being built – and the pyramid collapses.

When the Taxation and Budget Reform Commission met last year they had a chance to offer radical ideas to set Florida on the right path again. But the TBRC largely ignored taxation and budget issues and strayed into policy fights over school vouchers and other bits of nonsense like trying to rewrite the state constitution regarding the separation of church and state.

Its members, appointed by politicians, acted like politicians. And an opportunity was squandered.

And so now, here we are, having the same arguments in Tallahassee that we had a year ago. Democrats rightly arguing the state needs to raise revenue by closing some of the tax loopholes granted during the Nineties, and Republicans arguing the only way to become great again is to cut more spending in the hopes that people will want to move here again.

And since Republicans control both the House and the Senate in Florida, we'll see nothing but knives being sharpened.

The Republicans wouldn't even allow a bill to be introduced that would have raised the sales tax on a pack of cigarettes. Florida has the sixth lowest cigarette tax in the country. Raising the tax by $1 a pack would bring us up to the national average, cut teenage smoking dramatically, and bring in $600 million to $700 million in new revenue.
 
But we don't raise taxes in Florida. We cut them. We cut them all the way to the poor house.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)