Posted on 04/13/2006 5:08:20 AM PDT by RedBloodedAmerican
TALLAHASSEE -- Florida's wallet just bulged a little more.
With lawmakers ready to negotiate an already-flush budget, economists said Wednesday the state will bring in nearly $1 billion more in taxes than had been projected earlier.
The increase -- which comes on top of a similar $3.2 billion jump in November -- immediately touched off speculation about how lawmakers should use the money as they draw up a new budget during the coming weeks.
One possibility: Setting aside at least part of the money to help offset a $1.7 billion deficit in the state-backed Citizens Property Insurance Corp. Without help from lawmakers, property owners throughout Florida -- including those who are not Citizens' customers -- will get stuck paying off the deficit from last year's hurricanes.
Towson Fraser, a spokesman for House Speaker Allan Bense, R-Panama City, and state Chief Financial Officer Tom Gallagher said the windfall makes it easier for lawmakers to consider helping with the deficit.
"This is not a bailout of Citizens; it is common-sense relief for Florida's hard-hit homeowners," said Gallagher, who has long called for lawmakers to use tax dollars to cover the deficit.
Meanwhile, Senate President Tom Lee, R-Valrico, and Gov. Jeb Bush said lawmakers should put at least part of the money in the state's reserves. The economists said they expect smaller increases in tax revenues in the future, at least in part, because the housing market is slowing down.
"We need to prepare for the cooling down of the economy that is expected in the next few years," Lee said in a prepared statement. "Every ounce of fiscal discipline that we exercise today will mean a better financial outlook for tomorrow."
The state economists released the updated tax projections Wednesday after meeting for more than four hours to discuss financial data. The projections are a vital part of the state budget process because they tell lawmakers how much money is available to spend.
In all, the economists increased tax projections by $427.6 million for this year and $532.6 million for next year. The combined $960.2 million will be available to lawmakers for the fiscal year that starts July 1. The overall budget for that year could top $70 billion.
The economists had already upped the projections by $3.2 billion in November, in part because of the torrid real-estate market. The new projections stem from a combination of factors, including increases in sales taxes and corporate income taxes.
Lawmakers are on break late this week because of the Passover and Easter holidays but could start budget negotiations next Wednesday. They need to agree on a budget by the May 5 end of the annual legislative session.
Along with providing money to help pay off the Citizens deficit or to build reserves, Wednesday's projections also could bolster efforts by Bush and Bense to cut taxes. At the same time, however, lawmakers likely will face pressure to spend part of the increased money on education and social programs.
As an example, children's advocates have been lobbying to avoid funding cuts in the KidCare program, which provides health insurance to families who can't afford private coverage. Lawmakers are considering reducing funding because enrollment in the program has dropped.
"This is penny-wise and pound-foolish not to invest back into this program that we know works," said Ormond Beach resident Linda Merrell, who lobbies for the Florida Community Health Action Information Network, a group trying to prevent the cuts.
The author of the article from this liberal paper is doing what they can to not give credence to the efforts by Gov bush in the face of liberal lawmaker opposition.
FYI
Anybody who thinks the increase in the Florida revenue is spectacular had better just wait until the Federal revenue figures come in for this month. The Federal figures, with all the capital gains tax on gains realized during 2005, will knock your socks off. It really is Bush's fault.
According to the news the politicians are meeting today to determine how to spend this windfall. Jeb Bush would like to return the overtax to the taxpayers.
Hey if you see a thread on it would you ping me in case I miss it? Thanks...
Interesting the billion intake according to the article was from taxes. I don't see how I guess. I know Jeb dropped the 10 per gallon State gas tax during the hurricanes, don't know if he reinstated it, but I dont think he did. With the tax cuts Florida has had it makes me wonder if the money came from elsewhere and this author made it look like Jeb raised taxes? I dont know, am not savvy in this.
Just avoid giving in to the class size boondoggel. It is still lurking in the deficit woods.
A billion extra dollars.
If the state of Florida was an oil company, there would be hearings to investigate price gouging, price fixing, etc.
And they better put that money into Citizen's Insurance. Aside from the risk of hurricanes, Citizen's premiums are going up at a faster rate than property values are going up. For example, my insurance bill has gone up like this: $600 --> $1019 --> $2339 (this June). And all that money is going to subsidize the premiums of >$1 million homes. During the last 2 years, the value of 2/3rds of the hurricane damages paid by citizens went to a few thousand homes valued over $1 million. Those homeowners pay about double what an owner of a $100K home pays. That is literally subsidizing the rich at the expense of the middle class an poor. Everyone should be paying the same rate based on their homes value. And there should be a cap on damages. If someone can afford a million dollar home, they can afford insurance in the sub-prime market. And I do blame Jeb for this situation. He has been completely incompetent when it comes to the insurance market in FL.
It's a minor point, but I don't think the increase in state revenues comes from property taxes. I just looked at my property tax bill and I don't see any money going to the state. It all goes to the county. I think the real estate windfall at the state level comes from taxes on real estate transfers, which would be up considerably in recent years. Also, Florida's economy in general is booming, which would increase sales tax revenue to the state.
To a degree. The one thing I am sad about is that FL used to be a very inexpensive state with a very low cost of living. But with the rapid population growth, the rise in property values and insurance, it's not as afforable as it once was. I do know several older people that have put their homes on the market because they just can't afford the insurance. Most of them are planning on moving to rural parts of the Carolinas.
I wish we could trade State Rep.Allen Bense-R, for House Rep. Alan Boyd-D.
According to the news this morning, the surplus was a result of better than expected employment in the state last year.
I agree that something needs to be done about Citizens. Being a conservative, I have problems with the taxpayers subsidizing homeowners' insurance at all. But since I don't see Citizens going away, I propose that it stop covering houses with values over $1 million, indexing that to inflation. Ordinary middle class Floridians shouldn't be subsidizing millionaires' beach houses. I would also remove second homes and rental homes from Citizens' coverage. Cover primary residences with homestead exemption only.
Damn right!
If they don't do something about the insurance, it will start to damage the economy. I am seeing lots of houses going up for sale, and it looks like it is getting much harder to sell - lots of "price reduced" signs lately.
My insurance jumuped from 500 to 2600 in 2 years for my little house.
Old folks I know are just going without insurance, or selling.
I heard it through the grapevine that the cause of insurance rise in Pasco is basically due to one aggressive sinkhole attorney, whom Citizens basically just pays out to without challenging. If that is true, something is really wrong there.
About two weeks ago, the St. Pete Times had an article where the $1 million cap that was part of the reform of Citizens was removed by the politicians in Tallahassee. The rational was that is would not be fair to deny coverage to people because their homes are rapidly appreciating in value. I agree that the cap should be their and index to the appreciation of the real estate market, not to inflation. The people who own the million dollar homes on the beaches have good connections with the state's politicians and they get their voices heard loud and clear. After all, campaign $$$ speaks louder than voter frustration. The rest of us get screwed.
I disagree with the Homestead requirement you are proposing. It should be based on your primary residence. Some owner-occupied properties are not covered by homestead excemption. I'm still in the process of getting my green card so I can't qualify for homestead excemption yet. I'm getting hit by the full property tax increases and by the insurance b!tch slap. Also, I know people in mobile homes in rental parks. They don't get homestead excemption either. But banks require homeowners insurance if you are carrying a mortgage. If you don't get it, the bank will insure you with a monthly premium equal to your yearly premium through Citizen's. A bit of an exaggeration, but not far from the truth!
I live in Orlando and my insurance has gone up a whopping $50 over the past two years.
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