How to be number one in schools and business

From Florida Today

by Matt Reed

What exactly would it take to propel Florida up the rankings to No. 1 in education quality and No. 1 for low taxes for business?

Can any state possibly lead in both? Or must one come at the other's expense?

To find out, I picked apart national rankings and budget documents and buried myself in data.

The sum of which made clear: With two or three big moves, Florida could easily catch Maryland's No. 1 school system and South Dakota's No. 1 tax climate for business, as ranked by Education Week and the Tax Foundation.

For now, though, we lack the political will to win.

Know that these moves -- and little else -- would improve our rankings:

Raise school spending by a game-changing $1,224 per pupil to match the national average, Then, spend much of that $3.24 billion to improve teaching and college readiness for our system's "B" students.

Eliminate Florida's 5.5 percent state corporate income tax (a $1.52 billion revenue loss).

Cancel all sales tax exemptions besides those for food, rent, health care and utility bills. Remember, this is just an exercise in how to move up the rankings. I sit on no legislative committees. Anyone quoted here was merely a good sport who took my call.

"There's no talk anywhere in Tallahassee about finding new revenue, not even among Democrats," Sen. Thad Altman, R-Viera, told me.

See?

Top schools


Note what would not improve Florida's rankings in education.

It already leads in standards and testing, student learning gains, equal opportunity and funding for minorities, teacher and school accountability, "return on investment" for taxpayers and availability of school-choice measures such as vouchers, charter schools and online courses. More of that won't help the ranking.

But data repeatedly expose Florida's two deepest weaknesses -- overall funding and college readiness -- which threaten to park us permanently behind New York, Massachusetts and Virginia.

No way could Florida afford to increase per-pupil spending by $3,931 to match No. 1 Maryland. But it could improve its funding from an "F" to a "C" on the Education Week report by adding $1,224 per student. Then, Florida could leverage its way up the rankings by investing more in less-than-elite students bound someday for community and state colleges.

"I think the money would have to go for personnel in such a way that we could individualize instruction even more," said Brevard School Board Chairwoman Barbara Murray. "You look at the turnaround schools around the nation, including Cocoa High School, and it has been the culture of individualized attention there."

Murray said she would invest more locally in corporate-style research and development of teaching techniques.

Meanwhile, you may have noted that I ignore Florida's loss this year of $3.3 billion in federal stimulus money for schools, as reflected in Gov. Rick Scott's budget proposal. That's because all states will lose the same proportionately. So, it won't affect our base ranking.

Lowest taxes


Now, to our No. 1 rating for taxes.

Florida's corporate income tax has kept us stuck at No. 5 for nearly a decade on the Tax Foundation rankings. Our sales and property taxes are on par with Nos. 1, 3 and 4 and unemployment taxes are competitively low. Florida has no income tax. But South Dakota, Wyoming and Nevada have no individual or corporate income tax.

Ditch our 5.5 percent corporate tax -- a loophole-riddled joke that punishes Florida-based corporations -- and the Sunshine State moves to the top of the heap, the data strongly suggest. The move would cost Tallahassee about 7 percent of general revenue, which it can make up in blow for tax fairness that wouldn't affect Florida's ranking.

You see, Florida has never charged its corporate tax fairly. Just 5,300 companies pay 98 percent of the tax, namely medium- and large-sized corporations officially headquartered in Florida. It nails companies like Harris Corp. but takes nothing from neighboring technology companies in Melbourne that incorporate, register their intellectual property or process payrolls in other states. Publix, Sunbeam and Darden Restaurants pay the tax; Carnival Corp., Verizon and Toys R Us do not.

"We're the laughing stock of the country," said Altman, a Senate leader on tax and finance policy. "If we're not going to reform it, get rid of it."

How to pay


To recap, Florida's cost to reach No. 1 in schools and taxes would be $4.76 billion per year.

New revenue from canceling the sales-tax exemptions mentioned earlier would be $4.77 billion per year.

It's an even trade: 230 sales tax loopholes for Big Agribusiness and select special interests in exchange for the nation's best schools and tax climate for all businesses. And because the overall state sales tax rate would remain at 6 percent, killing the exemptions would cost us nothing in the tax rankings.

"I just don't understand the reluctance to do some of that," Murray said.

No? There's a reason I called this an exercise.

"I don't think you're going to see additional revenue produced at all this year," Altman told me. "Lawmakers are responding to the tea party. . . . These are going to be very lean times for government."

Contact Reed at 321-242-3631 or mreed@floridatoday.com.

http://m.floridatoday.com/breakingnews/article?a=2011102130347&f=748