Is the FL State Budget headed for trouble?

[frankfromfla]

I enjoy reading the post and wisdom from many of you on various subjects. Both the Bulls and the Bears... Both the Owners and the Want to be Owners.

I had a general question that I thought I would post here to see what you guys think.

Seeing FL does not have a State Income tax and the Taxes are earned from various other sources do we have a major shortfall on the Horizon?

I understand a lot of the revenue in the past has come from Doc Stamps on sales of real estate and also from Doc stamp from the mortgage, it seems with the dramatic real estate slow down the funds to the state have dried up substantially. I know in general states never seem to have enough money, but this seems to be a real big reduction in income and the budget and expenses are the same that they were. Sales tax on home renovation items is reduced as well, however the Doc stamps numbers are substantially higher.

I certainly don't want any new taxes but concerned if we are headed for a brick wall.

Any comments?

[Bob]

yes, major pain ahead. Education will take it in the shorts, even after promises to the contrary.

[Mango]

Here's an interesting Study with recommendations from the LeRoy Institute. There's also another study on the web page link called
"Shaping Florida's Future"

Contents

1 Letter from the Chairman

3 Revenue: A great run of growth about to level.

1980-2000 -- Twenty years of keeping pace.
2000-2005 -- Rescued by the real-estate boom.
2005-2010 -- Predictable slowdown.

11 Services: The big two and big trouble ahead.

PreK-12 Education - Compounding growth, the bottom less pit of class-size compliance.
Medicaid - An 800-pound gorilla with a mind of its own.

19 Infrastructure: Huge deficits, the coming crunch, a down payment.

23 Other services A bottom-level effort puts higher education and children's services at risk.

27 Demographic Factors: Immigrants, retirees, job structure and voter attitudes.

31 Recommendations
1) An official study commission
2) A comprehensive Medicaid study
3) Modify the class-size amendment
4) Policy adjustments, savings and innovation
5) Tax and revenue adjustments
6) No added tax breaks for retirees
Downloads

Tough Choices: Facing Florida's Revenue Shortfall (1.61 MB) "Adobe Acrobat PDF format"

[Rambunkscious]

Giving the property owners another 25,000 exemption is insignificant, this amounts to about 500 dollars relief. This will not solve our very huge problem.
Florida is about to fall off a cliff and its our politicians fault.

Also absolutely no relief on insurance. I dont know why anybody would want to buy property in the state of Florida considering these huge problems.
(And apparently nobody does but everybody sure wants to SELL property here)

[Bob]

what's the alternative????

[Rambunkscious]

The alternative is that the legislature would give the taxpayers some relief, as previously planned somewhere around 200,000 (not exact amount) exemption,
which would put our taxes in line with other states.

On insurance the alternative is for the state to take over the whole thing and lower premiums.

The real alternative that you now have is seeing u-haul trailers going north and school enrollment shrinking and hundreds of thousands homes listed and unsold and eventually foreclosed.

[scooterbug44]

I heard a rumor that if we don't have a major storm in 2007, the insurance companies cannot continue to justify their premiums and they will be lower (not low, but lower).

[SHELLY]

Frank,

It isn't heading for trouble....it's already there.

.

[dude]

Giving the property owners another 25,000 exemption is insignificant, this amounts to about 500 dollars relief. here)

if i am not mistaken the additional 25k exemption is guaranteed as of yesterday. however, a much larger proposal will be on the ballot jan. 29th.

[Rambunkscious]

Dude, I hope you are right but I think that proposal was cancelled by a
judge. Nope its 25 thousand and thats it except for some 10% cap per year that is transferrable to another property if you move.

Our politicians and governor has really disappointed us.

If you find more info on what you suggested in your post I would surely like to read it, I hope I'm wrong here.

[dude]

i'll look for it...i tried to locate the actual proposal as soon as I heard it passed. but what i found could very well have been the previous proposal; which as you suggested was ruled incomprehensible to the common man by the judge.

will be in touch shortly.

[dude]

Dude, I hope you are right but I think that proposal was cancelled by a
judge. Nope its 25 thousand and thats it except for some 10% cap per year that is transferrable to another property if you move.

Our politicians and governor has really disappointed us.

If you find more info on what you suggested in your post I would surely like to read it, I hope I'm wrong here.

i believe, unfortunately, you are correct. from what I have read (& yet to find the actual bill) this proposal is reasonably useless & not worth the gas money i will have to spend to go vote for it; other than to show my displeasure with the effort with a thanks but no thanks NO.

how exactly is a $240 tax break going to stimulate anything? if we do not make damn sure that the boomers head our way we are going to be severely up the creek.

[Rambunkscious]

The reason for the state shortfall is the lack of doc stamps. The reason for the lack of doc stamp revenue is due to the lack of real estate transactions.

COUNTY property appraisers value residential properties for your 2007 tax bill as of their sales comps at January 1, 2006 (an abnormal market) so your 07 taxes are based on an abnormal ballooned up market. This is totally unfair but it is Florida law. County appraisers can by law value your property at 100% of its value, most of them do not,but some of them do, showing their "let them eat cake" side. This insensitivity should be remembered when they are up for re-election.

So with the unfair tax burden, many buyers seek property in other states without this burden, so the doc stamps dont get bought and sent to Tallahassee.

It is a vicious cycle and nobody in state government has yet to figure it out. Don Gaetz, our representative is the exception here but he does not have a following statewide.

[Rambunkscious]

Dude, I was figuring 20 mills times 25k or $500, but even at that, you are correct that this is in effect not meaningful.

[frankfromfla]

Thanks everyone for the comments. Keep them coming. Could it get so bad as for the state to consider bankruptcy or have a shutdown?

Where I was headed was I felt the schools and local goverment should be ok with moderate budget reductions as there income comes from Property taxes but I was more concerned about the General Fund running out of money.

I have a son at FSU and also visited UF recently and sure seems there is a lot of building going on. Wish we could attract the masses to help us out.

I am formally from New Orleans, but left in 2001. Post Katrina one thing we just realized that the older people did not rebuild in areas like Lakeview because they did not want the hassle again. Perhaps our hurricanes of recent years scared new retirees from heading to the Sunshine State....

[SHELLY]

i'll look for it...i tried to locate the actual proposal as soon as I heard it passed. but what i found could very well have been the previous proposal; which as you suggested was ruled incomprehensible to the common man by the judge.

will be in touch shortly.

Here Ya Go: (From Orlando Sentinal)

Here is what the Legislature's property-tax-cut package, if approved by voters Jan. 29, would mean to you:

If you own your residence:
The bigger homestead exemption ($50K vs $25K) will save you about $240.

If you buy a more expensive home:
You can apply your accumulated Save Our Homes tax savings to your new home. For example, assume your old home has a market value of $300,000, reduced to a taxable value of $150,000 by SOH. If you buy a new home for $400,000, it would be assessed for tax purposes at $250,000. This benefit is capped at $500,000.

If you buy a less expensive home:
If you trade down to a $200,000 condo, your savings would be figured on a percentage basis. Because SOH was worth 50 percent of your home's value, the tax value of your $200,000 condo would be cut in half, to $100,000. (In both examples, you would also get a homestead exemption.)

If you own business or commercial property:
Your assessment can't increase by more than 10 percent a year. In addition, most of the state's businesses will no longer pay tangible personal-property taxes on their equipment, thanks to a $25,000 exemption.

If you own a second home:
The 10 percent cap will apply.

If you move here from out of state:
You will likely pay higher taxes than your neighbors because you don't have any accumulated savings from SOH.

LESS CASH FOR COUNTIES, SCHOOLS:
Below are the estimated amounts, in millions, that each agency will lose out on in 2008 if voters approve the tax-cut package, based on current tax rates.
County Schools
Brevard $29.7 $2.8
Lake $17.8 $2.9
Orange $56.3 $8.1
Osceola $9.3 $1.7
Polk $26.5 $4.6
Seminole $27.5 $5.6
Volusia $37 $3.4
SOURCE: Florida Senate

[Babyblue]

There is a very simple solution to this problem. A state personal income tax. Problem solved. Do I have to think of it all?

[SHELLY]

There is a very simple solution to this problem. A state personal income tax. Problem solved. Do I have to think of it all?

An even simpler solution: Politicos should stop using our tax money to appease the whims of fat-cat developers and feathering their own retirement nests.

.

[dude]

don't like that idea one bit...i don't own a home but i do make some income. how bout consumption?

[Bob]

i believe, unfortunately, you are correct. from what I have read (& yet to find the actual bill) this proposal is reasonably useless & not worth the gas money i will have to spend to go vote for it; other than to show my displeasure with the effort with a thanks but no thanks NO.

how exactly is a $240 tax break going to stimulate anything? if we do not make damn sure that the boomers head our way we are going to be severely up the creek.

send me the 240 so I can help pay my bill.

[Babyblue]

An even simpler solution: Politicos should stop using our tax money to appease the whims of fat-cat developers and feathering their own retirement nests.

.

There is even a simpler solution than that. What about sifting some of that lottery money around? Now see that is something no one has thought of. The funds moved around are EVEN funded by the tourist that the fat-cat developers bring into the state. Ha!

[SHELLY]

There is even a simpler solution than that. What about sifting some of that lottery money around? Now see that is something no one has thought of. The funds moved around are EVEN funded by the tourist that the fat-cat developers bring into the state. Ha!

That will mean <they'll claim> the Florida education system will suffer, which will force Florida's tikes out into the streets hawking overpriced chocolate bars, nuts and cookie dough (which pumps up corporate profits as well) even more times than they already are!

.

[Babyblue]

That will mean <they'll claim> the Florida education system will suffer, which will force Florida's tike's out into the streets hawking overpriced chocolate bars, nuts and cookie dough (which pumps up corporate profits as well) even more times than they already are!

.

I do not think that will happen.

[beachmouse]

I have a son at FSU and also visited UF recently and sure seems there is a lot of building going on. Wish we could attract the masses to help us out.

Per student funding in Florida higher education right now is abysmal- thirty years of explosive growth and funding has not kept up anywhere near that growth. Tallahassee refuses to increase funding consistent with enrollment growth, and then throws a fit when a school asks to raise tuition to cover the gap.

I've worked in the system off and on since 2000, and from what I've seen over the years, the only public univeristy in the state I'd tell a good student to go to is New College.

[Mango]

don't like that idea one bit...i don't own a home but i do make some income. how bout consumption?

I am confused as to what is actually taxed in Florida? I know food is not, but based on the States income tax web site, it makes it sound like only rental/ tourism services like rental cars etc. are taxed.
Consumption seems logical.

Here is an interesting piece of the above study I posted, although I find it to be lacking in many areas.

No added tax breaks for retirees

That is not an idea, we should stipulate, under active consideration in Florida to our knowledge. However some states have taken such action – Mississippi, for instance, designating as partially tax-exempt several areas for the development of retirement communities. Georgia debated, but did not pass an income tax waiver for retirees moving to the state. We anticipate more such action as the courting of baby-boomer retirees gathers momentum. Our research suggests taxes are a minor factor in determining decisions of retirees on where to locate, and only very large reductions hold any promise of making a difference. Besides we think it is fair to ask retirees to contribute to adequate provision of education and other services in their new state. Many received a recent tax break with the partial repeal of the intangibles tax.

[scooterbug44]

An even simpler solution: Politicos should stop using our tax money to appease the whims of fat-cat developers and feathering their own retirement nests.

.

I vote for that solution instead of a state income tax!

[Bob]

There is even a simpler solution than that. What about sifting some of that lottery money around? Now see that is something no one has thought of. The funds moved around are EVEN funded by the tourist that the fat-cat developers bring into the state. Ha!

yes, take the Lotto money away from education?!?

[pmd8]

Good news: Fewer people moving to Florida
Posted on Sun, Jan. 13, 2008
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By CARL HIAASEN

The mad stampede of new residents into Florida is finally slowing down, the inevitable result of high taxes, miserable traffic, overcrowded classrooms and other unappealing urban problems.

According to the Census Bureau, the state's population grew by only 1.1 percent during the 12-month span ending last July 1. That's a significant dip from the 1.8 percent increase recorded the previous year, and it drops Florida's growth rate to 19th in the nation.

This is a cause for relief, not panic. Any lull in the avalanche of incoming humanity should be eagerly welcomed by the 18.3 million souls already living here. The last thing we need is more warm bodies clogging the roads, schools, courts, jails and hospitals.

A break is long overdue. It's not a crisis but rather an opportunity. At long last, state and community leaders might be forced to intelligently confront the economic blowback from decades of inept planning and greed-fueled runaway growth.

With each passing day, Florida is becoming a less desirable place to live. For the first time in modern memory, moving companies report that they're transporting more families out of the Sunshine State than into it.

The disenchantment is widespread and deep-seated, judging by a new Mason-Dixon survey that was released by Leadership Florida, a group founded by the state Chamber of Commerce.

Of more than 1,100 residents interviewed by telephone in November, 43 percent said their quality of life has declined over the last five years. That's an eye-popping number, up 7 percent from 2006.

More evidence that lots of people see their Florida dream dissolving: Of those surveyed, only 24 percent said they think things will get better during the next five years. Thirty-seven percent believe the state will become a worse place to live during that time.

The increasingly glum outlook of many Floridians isn't just a reaction to off-the-chart property taxes and insurance rates, as politicians want us to believe.

More and more folks are figuring out what serious urban planners have known for a long time: Run-amok growth doesn't pay for itself. Taxpayers always get stuck with the bill for sprawl and also with the hometown ills it brings. By an overwhelming margin of nearly three-to-one, Floridians polled in the Leadership Florida survey oppose higher population densities in their neighborhoods -- a view that resonates fairly evenly among registered Democrats, Republicans and independents.

A majority of residents, 52 percent, believe local governments are ''not effectively managing growth'' in their communities. The figure is unchanged from 2006, and the Mason-Dixon pollsters describe the sentiment as ``strong and and consistent among all groups and across the state.''

Respondents were divided evenly when asked whether new people moving into Florida was good or bad. The question is rarely even whispered among politicians, many of whom live in fear of antagonizing the developers, bankers and road builders who bankroll election campaigns.

The beleaguered sense among many Floridians -- that they're not only being overtaxed but overrun -- will not soon go away. Politicians who resist calls for strict land-use reforms and continue to shill for special interests risk being dumped from office by those whom they've ignored.

It's happened already in scores of municipalities where voters got fed up watching their green spaces malled and paved while the waterfronts went condo.

The social equation isn't complicated. The more people you cram into a place, even a place as vast and geographically diverse as Florida, the more stressful life becomes for everybody. It also becomes more expensive. Ask anyone in New York or California what happened to their taxes as the populations of those states swelled.

A bipartisan group that advocates semi-sane growth policies, 1000 Friends of Florida, last year predicted that the state's population would double to 36 million by 2060, and that seven million acres of agricultural land and wilderness would be converted to concrete and asphalt.

That was before the real-estate market tanked and the subprime mortgage racket imploded, but there's no denying that even an overcrowded Florida continues to hold some mythical allure, whether you live in Dubuque or Port-au-Prince.

Despite their rising disillusionment, about 62 percent of those interviewed for the Leadership Florida poll said they'd still recommend the state as a place for friends or relatives to live.

For strangers? Maybe not. Because growth is an exalted industry unto itself, rather than the natural result of a broadening economic base, lawmakers have always focused on attracting hordes of new residents at all costs. The first casualty of such a fast-buck mentality is the quality of life.

One out of five Floridians surveyed in November say they are ''seriously considering'' moving elsewhere.

This is what's known as a message. And, for those who've sold out Florida's future to enrich their campaign coffers, it breaks down like this:

Enough.