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Will Florida's Better Economy Mean Less Legislative Cost Cutting?

Photo courtesy of Capital Outlook

A few months before each lawmaking session, Florida TaxWatch rolls out its wish list of cost-cutting measures for state government.  Tom Flanigan reports this year is no exception, although a brightening economy may have reduced the need for lawmakers to cut expenses….

On the very same day TaxWatch came out with its 2013 list of recommendations, the Florida Supreme Court gave the organization a huge boost.  The high court, as TaxWatch had urged in a pleading called an “amicus brief”, upheld the requirement that Florida Retirement System participants kick three percent of their salaries into the pension plan.  To say TaxWatch President and C-E-O Dominic Calabro was a happy guy would be a vast understatement.

“At the end of the day, the taxpayers benefit, but also the core functions of state and local government benefit.  It is now a path of encouragement for us to go in and further reform and bring it into balance not only our state retirement system, but also our state health benefit.”

Calabro says TaxWatch suggests moving state employee health plans from the current “defined benefit” plan to a “defined contribution” set up.  As things are now, employees pick a health plan, such as an H-M-O.  They pay a fixed rate for that coverage each month, which is a fraction of the total cost.  The employer makes up the difference.  Calabro says a defined contribution plan is better.

“We say, ‘Okay, we’ll give you $8,000 or $10,000 or $12,000 for you and your family.  Go forward and pick what makes the best sense for you rather than have the state pay for things that you’re never going to use.”

More choice for state workers, Calabro says and a lot of savings for the state; somewhere north of three-hundred-eighty million dollars a year.  That’s the biggest single savings suggestion in the new TaxWatch Task Force recommendations.  Second biggest is halting the “use it or lose it” spending rush so many state agencies indulge in towards the end of every fiscal year.  Calabro says that would save the state around two-hundred-thirty million dollars a year.  Using electronic monitoring instead of locking up minor criminals?  About a hundred-million dollar a year savings.  Calabro says the twenty-five member TaxWatch task force also looked at the revenue side of the state ledger.

“We talk revenue enhancement, we’re talking about the remote sales tax where the law requires people to pay a use tax when they buy online or mail order from remote sellers that don’t have a presence in Florida.  That is an issue that will bring in about sixty-million dollars.”

TaxWatch has been pushing the idea of the remote sales tax for several years, but a tax-averse legislature has pretty much ignored the idea.  Calabro admits many of its suggestions last year suffered the same fate.
“2012 was not as successful.  The state only implemented about four or five hundred million dollars. 

"That’s a lot of money.  That’s nothing to look a gift horse in the mouth over, but relative to the size of what we had offered it was small pickings.”

What about the prospects for TaxWatch’s one-point-two billion dollar savings plan for 2013? 

"The general revenue of the state is going to grow by a billion dollars.  Why don’t we double that, or replicate it through savings in the budget?  We’re going to have rising costs for Medicaid, we’re going to have rising costs through the federal healthcare laws.  We have rising demands, the governor’s made a commitment, as has the legislature, to not only restore some cuts in the past for kindergarten through twelfth grade public education but also for some enhancements to attract and nurture excellent teachers but also great principals.”

The principal question remaining, though…with the budget-cutting pressure of the past several years finally gone, how inclined will lawmakers be to stay in frugal mode?