Thursday, April 03, 2008

SENATE DEMOCRATS OUTLINE IMPENDING BUDGET CUTS

SENATE DEMOCRATS OUTLINE IMPENDING BUDGET CUTS; CALL ON LEADERSHIP TO CLOSE EXCLUSIVE LOOPHOLES COMPOUNDING FINANCIAL CRISIS
 
TALLAHASSEELess than one year after Florida was lauded by the Harvard University Kennedy School of Government for its top national position in improving the delivery and integrity of food stamp services, state budget cuts may force its return to the bottom of the heap.
 
"According to recent reports, Florida is now among the top states with the growing number of residents in dire need of food stamp assistance," said state Senator Nan Rich (D-Weston). "The cuts we're facing not only drastically impede our ability to deliver that help, but failure to meet the federal controls on maintaining the integrity of the program will likely result in federal sanctions costing the state even more."
 
In a press conference on Thursday, the Weston Democrat joined Senate Democratic Leader Steven Geller (D-Cooper City) in outlining the impending cuts to health and human services as a result of Florida's budget shortfall. The veteran lawmakers also questioned the Legislative Leadership's reluctance to close certain loopholes used almost exclusively by wealthy corporations and high-end commercial developers.
 
"These cuts will cut a wide and devastating swath across our state," said Rich, a leading advocate for children and families in most need of help. "To continue to protect these tax avoidance tactics will come at the expense of hundreds of thousands of children, the disabled, the elderly and the catastrophically ill. It's not only heartbreaking, it's unconscionable."
 
"It's a parade of horrors," echoed Geller. "People will not only needlessly suffer, they will die."
 
 
According to the lawmakers, some of the most egregious cuts Floridians are facing include:
  • Medically Needy: A critical program that covers Floridians who suffer from catastrophic illness such as organ transplant patients, and either have no health insurance, or have exhausted their benefits. More than 16,000 individuals currently in this program are expected to be ousted.
  • Abused Children: Thousands of children living in troubled households under scrutiny for possible child abuse will no longer have the safety of protective investigators on which to rely. Budget cuts are targeting 71 positions dedicated to probing allegations of child abuse. The cuts are also expected to overwhelm remaining investigators already swamped with high caseloads.
  • Senior Citizens and the Disabled: More than 24,000 elderly and disabled Floridians are facing the loss of health care and prescription drug coverage due to cuts targeting MEDS AD, or Medicaid Aged and Disabled Program, which typically provides Medicaid coverage to the very poorest of residents in this state.
 
"We're losing the safety net our state worked so hard to create," said Rich. "These children, these seniors, and these disabled are suffering through no fault of their own, and can't afford the protections they so desperately need. Pulling the plug on these programs is tantamount to pulling the plug on their lives."
 
The Democrats again urged the legislative leadership to re-examine a number of tax loopholes that could,  if not spare the cuts, at least blunt their severity.
 
"Under the Bush administration, there was a massive tax shift in this state," said Geller. "The burden was almost entirely dumped onto home owners and small business owners, giving the largest non-Florida corporations and the mega-wealthy a free ride when it comes to paying for the same government services, like the courts or the police, the rest of us pay for.
 
"We're not here to support raising taxes on Floridians already paying them. We're here to say it's time to close the loopholes and level the playing field."
 
The worst of the budget cuts facing the state could be spared and across-the-board tax hikes could be avoided by closing at least three major tax loopholes:
 
  • Real estate transfer tax: a tax paid by most Floridians when real estate is sold. Through complicated (and so far, legal) maneuvers, very wealthy developers have evaded that tax by – in one commonly used tactic - placing real estate into a trust, transferring the trust into a corporation, and then selling the stock in the corporation. For example, one company's reported 2005 sale of six apartment complexes recorded the $300 million deal at only $60, and so avoided a $2.1 million tax bill. Legislation sponsored by Sen. Geller would close all of the tactics used under this loophole. Estimates vary, but closing this escape hatch could net anywhere from $50P million to $200 million annually.
 
 
  • Combined reporting: Multi-state and multi-national corporations tap this loophole by setting up tax shelters off shore, or dividing one business into several, one of which is in a state where no tax is collected, such as Delaware . The bulk of the business transactions is then shifted to the corporation in the no-tax state so that tax due in Florida is avoided. This maneuver leaves those Florida-based and operating companies at a great disadvantage. Closing this loophole could net up to $400 million a year.
 
  • Deep sea fishing charters: A year-round operation in Florida , closing this loophole exclusive to high end recreational fishing enthusiasts could garner the state an estimated $65 million.
 
The Democratic lawmakers reaffirmed their support for a video lottery terminal measure sponsored by Republican Senator Dennis Jones which could net an estimated $300 million to $500 million annually. They urged fellow legislators to do the same.
 
"We realize our economy is in trouble and a number of budget cuts are going to be necessary," said Geller. "But unless we reverse some of the give-aways of the prior administration, our money problems are going to continue. We can't keep cutting the services most of us depend on and have been paying for, without looking at the other end of the spectrum getting a free ride."
 
 
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