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Monday, April 25, 2011

It's reverse Robin Hood time in Florida

From the Palm Beach Post

by John Kennedy

TALLAHASSEE — Gov. Rick Scott and Florida's ruling Republicans have vowed to pass a no-new-taxes state budget, slash government spending, cut regulations and spur corporations to create jobs.

But many Floridians will have to dig deeply into their wallets to make the GOP's promises come true.

More than 7 percent of the state's workforce - 655,000 teachers, firefighters, police and other government employees - are almost certain to absorb pay cuts as lawmakers pull pension contributions from them for the first time in almost 40 years.

Property insurance, telephone and possibly electricity rates could climb for millions more Floridians under bills poised for approval in the legislature.

College and university tuition likely will go up, even as financial aid is reduced.

And budget cuts in health and human services could leave thousands of low-income, elderly and disabled Floridians in the lurch. With government assistance ending, many would face staggering out-of-pocket costs for prescription drugs, primary care or other needed services.

But as the legislature opens its second-to-last scheduled week, leaders are struggling to launch final budget negotiations. Scott's campaign promises are clouding talks.

Lawmakers have taken tough steps to close an almost $3.8 billion shortfall. But Scott's demand for $2 billion in tax breaks - mostly for corporations and property owners - may force lawmakers to cut deeper.

Middle- and lower-­income Floridians might have to pay even more, critics warn.

"It's reverse Robin Hood this year in Tallahassee," said House Democratic Leader Ron Saunders of Key West. "It seems like all the burden is falling on the middle class and the poor. They're paying more, and all the benefits look like they're going to the big corporations."

House Speaker Dean Cannon, R-Winter Park, rejects the notion that the legislature is overly favoring Florida businesses at the expense of working Floridians.

But he defended the need to shield companies from more costs - even as budget reductions take a big bite out of schools and health and social programs.

"The last thing we need to do right now is to make it harder for a small business to hire somebody by raising the cost of producing their goods or providing their services," Cannon said. "And we're not going to do that."

Florida's unemployment rate dropped to 11.1 percent in March, the lowest level since November 2009. But with more than 1 million Floridians still jobless, the economy has framed the legislative session.

Scott campaigned on shrinking government, cutting taxes and promising to create 700,000 jobs over the next seven years.

Throughout the session, Scott's way has had the backing of the Florida Chamber of Commerce, Associated Industries of Florida and other corporate­-powered business organizations, whose campaign contributions in last fall's elections helped the Republican Party gain its strongest grip on Florida government.

But Scott was ambiguous when asked whether life would get tougher for lower-income Floridians based on actions this spring in Tallahassee.

"I hope not," Scott said. "First off, we've got to get this state back to work. My goal is to make sure we're reducing the cost of state government. But the biggest thing is, people need a job."

Despite the punishing economy, many people will be paying more.

"It's a tough time to face the kind of budget cuts and other changes the legislature is looking at," said Ed Moore, president of Independent Colleges and Universities of Florida. "It's going to put a lot of pressure on families."

Students at Moore's schools are likely to lose at least $300 from the $2,425 Florida Resident Access Grant earned by several thousand undergraduates.

The popular Bright Futures scholarship program also would be reduced under legislation advancing in the House and Senate, with standards for obtaining the award also made tougher.

Public schools are facing cuts of at least $1 billion under budgets prepared by the House and Senate. School districts have warned that the level of reductions could put more teachers out of work.

"Republican leaders talk about the need to invest in education. But to invest you need revenue, and that's not there," said Sean Snaith, a University of Central Florida economist.

Snaith said Scott and legislative leaders clearly subscribe to the approach that the economy will be jump-started when state oversight is removed and public services shrink to lessen the tax burden.

Scott's plans to phase out the state corporate income tax and reduce property taxes also are seen as lures to businesses willing to relocate or expand to Florida, Snaith said.

"Sure, that's part of the recipe for businesses considering their next step," he added. "But it's a much more complex dish. If anything, market conditions are going to shape whether a company expands or contracts further."

But legislation still being shaped as the session winds down could dampen the economic boost leaders are seeking, because it takes income from Floridians, critics warn.

About 1.3 million Citizens Property Insurance Corp. policyholders look certain to face rate increases of as much as 25 percent next year, under measures supported by leading lawmakers eager to streamline the state-backed carrier and give private insurers more incentive to write policies.

Meanwhile, private insurers may get their wish and be allowed to drop sinkhole coverage. Insurers argue that claims payments are out of control and say they want to be freed from current state requirements.

Backed by telephone companies and state utilities, legislation on phone and electricity rates also remains in play in the session's homestretch. That could lead to higher consumer costs.

"Business is getting what it wants this session," said Bill Newton of the Florida Consumer Action Network. "They're the only constituents pleased by this legislature."

But Rep. Will Weatherford, in line to succeed Cannon as speaker, said lawmakers' approach this spring is a reflection of what they heard from voters last fall.

"The citizens of Florida sent us a very loud and clear message: They don't want us to spend money we don't have," said Weatherford, R-Wesley Chapel. "Does that mean that there will be certain areas within our budget that feel pain? Absolutely.

"But there's never been a legislature in recent history that has had to make the decisions we've made."

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