Dominic Calabro: Righting Taxes

Dominic Calabro on tax reform in Florida

Righting Taxes By Dominic Calabro, Florida TaxWatch Originally published in the Feb/Mar 2011 issue of 850 Business Magazine

As the nation recovers from one of the worst economic recessions in history, our state continues to battle unprecedented fiscal challenges and budget shortfalls that have made business-as-usual in state government an unsustainable course.

The 2011 Florida Legislature is facing yet another in a series of tough fiscal years with a projected multi-billion dollar budget shortfall. This year, our state faces new challenges while continuing to solve the problems of yesterday. We face the imminent cessation of extended stimulus funding and generous federal match contributions, which poses the threat of further shortfalls; recent federal health care legislation is projected to dramatically increase the state’s Medicaid enrollment; and significant financial obligations are coming due, such as the unemployment compensation fund.

We now know that the budget deficit will likely exceed $3–$3.5 billion dollars and the state will owe billions more to the federal government through the unemployment compensation fund. Now, more than ever, state government and its elected officials will need to find innovative ways to save taxpayer dollars and contain costs while preserving core services and programs. To help do just that, Florida TaxWatch has released a 205-page report of the Government Cost Savings Task Force for FY 2011–12 that identifies 125 ways to improve the productivity, efficiency and effectiveness of state government. Among the recommendations: improving collection of legally owed sales taxes on remotely conducted sales, expanding managed care in the Medicaid program and better identifying waste and fraud, removing exemptions to competitive bidding, standardizing the business process and conducting a top-to-bottom review of the criminal justice and corrections system to identify savings. (The report can be accessed at FloridaTaxWatch.org.)

The report is the work of more than 40 concerned Floridians who were brought together by Florida TaxWatch on behalf of all the state’s taxpayers, including businesses and individuals. Members of the task force included current and former elected officials, such as Gov. Rick Scott, Attorney General Bill McCollum, Chief Financial Officer Alex Sink, state Sen. J.D. Alexander, and state Rep. Will Weatherford, and business leaders like Marshall Criser III, president of Florida AT&T. They worked for six months to find constructive, pragmatic, principled cost-savings with special emphasis on pensions, Medicaid and health care, criminal and juvenile justice and government procurement. These recommendations will generate savings to help close the budget gap without compromising core services and programs that Florida’s most vulnerable populations rely upon. They also provide much needed capital reserves for state government. The total estimated savings for all 125 recommendations are $3.5 billion–$4.4 billion in FY 2011–12 — just enough to close the budget gap.

There are recommendations in eight core policy areas, with each chapter featuring a comprehensive report outlining specific issues and complexities facing the policy area as well as best practices to solve these problems, including those utilized by other states that have dealt with similar problems.

We have shared these recommendations with legislative committees, state agencies and the executive office. In December, the final report was officially presented to Gov. Scott through Lt. Gov. Jennifer Carroll, who called it critical to implementing Scott’s top priority of creating new jobs. We look forward to working with the Legislature and the governor’s office to implement many of these recommendations to create immediate cost-savings and cost-containments in the upcoming fiscal year.

Our report builds on the success of previous Florida TaxWatch efforts that have generated more than $3 billion in savings since the publication of the first report in January 2009. Last year, the Government Cost Savings Task Force for FY2010–11 published 88 specific recommendations worth $3.2 billion that targeted reducing state government operating expenditures, increasing productivity and maximizing state revenue collections. At the close of the FY2010–11 legislative session, more than one third or 27 of the recommendations made by the task force were enacted by the Legislature. According to published estimates, the recommendations implemented in legislation or as part of the FY 2010–11 state budget are worth more than $1.1 billion in cost-savings to the state.

I believe this year’s report and its 125 recommendations build upon and strengthen the 31-year-old mission and successful track record of Florida TaxWatch to improve taxpayer value, citizen understanding and government accountability. This mission has never been more vital to the state as Florida must work to solve complex, structural problems to create a more sustainable, healthy economic environment. In these times, it is absolutely imperative that smart, discreet and judicious revisions and reductions be made to the state budget to create a more financially sound and modern government under which each family, business and community may prosper.

Dominic M. Calabro is president and chief executive officer of Florida TaxWatch, a statewide, non-profit, non-partisan government watchdog and research institute for taxpayers. Florida TaxWatch was founded in 1979 to improve government productivity, taxpayer value and citizen understanding, and to encourage responsible participation by Floridians in their state and local governments.