The economic decline is only part of the problem. Unemployment in Florida is at a 15-year high. The "brain drain" of professors accelerates as state money for universities has diminished, university officials complain. The state pension fund has lost one-third of its value. And for the third year in a row, the state will take in less tax revenue this year than the year before.
For the past year, the official response from Crist and the Legislature to the economic crisis has been to cut spending, borrow from cash reserves, hold back 4 percent of state agencies' budgets, and take largely cosmetic steps, such as accelerating the construction timetable for roads.
Crist said he is open to a special session in January, so that legislators can make deeper budget cuts. But he has said he wants to shield public schools and healthcare, which make up the bulk of the budget, from more reductions. Crist's agency heads warn that more cuts would mean layoffs of state workers, which would drive the jobless rate higher.
Secretary of Corrections Walt McNeil said he has ordered spending reductions, including an end to travel and training, but fears additional spending cuts. "The only way we can achieve that is to let people go," McNeil said. "We will have to lay people off."
Some short-term budget fixes have emerged, but many of them produce too little money or lack widespread support from the Republican majority that controls both houses of the Legislature.
They include selling or leasing to private investors such assets as the Florida Lottery, Florida's Turnpike or Alligator Alley; hiring more auditors to aggressively chase tax cheats; raising fines and fees for state services, as the Legislature did for the court system last spring; raising the cigarette tax by up to $1 a pack, which would generate about $1 billion a year; expanding gambling and validating the compact with the Seminole Tribe, which would generate more than $100 million a year; and extending the sales tax to Internet sales, which would produce an estimated $3 billion a year.
None of those would represent any structural change in the Florida tax system, which some economists say is needed to avoid future cyclical downturns made worse by recessions.
"The weaknesses reveal themselves under stress," said Sean Snaith, an economist with the University of Central Florida's Institute of Economic Competitiveness. "Hopefully, that will underscore the need for some real tax reform to find a stable, equitable way to fund the things we agree on."
But in the Republican-led Legislature, little support exists for a review or overhaul of the tax system, which is typically framed by critics as a back-door way of increasing taxes. Last spring, a far-reaching proposal to eliminate property taxes for schools and replace the revenue by expanding the sales tax and repealing tax exemptions didn't reach voters because the Florida Supreme Court ruled that it was misleading.
As the economy worsens, demand for government help goes up. For example, complaints to the state child-abuse hot line are up by 1,000 a month so far this year, compared to last year.
Florida State University President T.K. Wetherell, a former House speaker and community college president, sees a state unwilling to face its challenges. He sees his university as the "training ground" for young professors who leave for better-paying jobs elsewhere.
"You can't be a world-class state and use the tax system that we have," Wetherell said. "This system is not going to produce the resources that we need to run one of the largest states in the nation and provide the services that people want. You can't keep putting Band-Aids on it."
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(Miami Herald staff writer Marc Caputo contributed to this report.)
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(c) 2008, The Miami Herald.
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