The “People’s Budget” not best for some people

Facing a $2.4 billion shortfall, Florida lawmakers decided Sunday to proceed with their initial plan to make large cuts to education and health care.

Gov. Charlie Crist has kept a low profile, supporting only popular amendments, which has worsened the pitiful condition of the state coffers.

The outlook for K-12 in 2009 is dreadful. About $365 million of the in-class education budget is expected to be cut.

Legislators said they have “no choice but to cut” the budget, according to a Palm Beach Post article.

This is absurd given that, in addition to ignoring cries to restructure the tax code, the legislature has increased funding for prisons. More than $300 million is allocated for the construction of one private and two public prisons. One might wonder if lawmakers are preparing for the consequences of a faulty education system resulting in a new breed of undereducated hoodlums.

A careful review of the tax changes from the previous administration could be seen as the tipping point of the budget crisis. In 2006, Gov. Jeb Bush signed into law a bill abolishing the intangibles tax. Enacted in 1931, the intangibles tax generated revenue from stocks, loans, bonds and accounts receivable of individuals and businesses.

Its most recent incarnation was a tax of $2 for every $1,000 worth of value. Additionally, it exempted individuals making under $250,000 and couples making under $500,000.

According to a Florida House of Representatives staff report, the elimination of the intangibles tax resulted in a loss of nearly $300 million in state revenue.

It is bewildering that the government would think it prudent to give couples making more than half a million dollars priority over a struggling public education system.

Legislators should not dismiss a possible re-enactment of the intangibles tax. After all, it would result in a marginal tax on the wealthiest citizens and would give much-needed relief statewide. The $300 million in lost revenue could cover more than half of what will be cut from the secondary education system.

Even without specific information regarding the current budget shortfalls, it would be optimistically delusional to think there won’t be further negative effects on public universities.  Sadly, the outlook for education majors looking to work in Florida’s public school systems is bleak.