When George W. Bush was an oil man (and not a very good one,) he named one of his companies Arbusto, meaning "little Bush" in Spanish. Others in the industry derisively called the company "El Busto," because it had a little meeting its prime directive: finding oil in Texas.
When El Busto's little brother was running Florida, he spent eight years exsanguinating state revenues by slashing taxes on wealthy Floridians and corporations (while cutting Medicaid and other healthcare benefits for the poor, disabled and elderly, and raising tuition at the state's colleges), and privatizing everything he could get his hands on, from state payroll services to prisons. Now that the state has a shiny new, totally not gay, Republican governor, we're supposed to be reaping the windfall of the twin Bush booms -- the national one that was supposed to be brought on by Dubya's aggressive tax cutting, and the local one that was supposed to be the "smart Bush brother's" legacy to Charlie Crist. Well ... a funny thing happened on the way to the boom: Florida, it seems, went bust. From today's Miami Herald:
TALLAHASSEE -- The top job-loss state in the nation. Shrinking wages. Collapsing population growth. Record home foreclosures. Florida's economy is not just firmly and bleakly in the red ---- it will likely stay that way until next June, according to the state government's top economists who issued their most pessimistic financial forecast in years. With few exceptions, the economists' Wednesday forecast shows that most economic indicators will do worse in this budget year when compared to a forecast they issued in February. At the heart of the problem is the falling housing market, upon which Florida's economy has a Monopoly game-like reliance. The economists projected new housing construction will fall to about 60,000 units this year -- a decrease of 78 percent from a high of nearly 283,000 in 2005. Total statewide construction expenditures, including public buildings, are expected to decrease by $10.6 billion, or 21.5 percent. The most dire fact of all: Florida lost more jobs in the past 12 months -- 74,700 -- than any other state in the nation. And the economists predict that more people in construction, government, manufacturing, financial services, transportation and warehousing will be out of work soon. ''We were No. 1 in jobs created in the entire country,'' said Clyde Diao, one of Gov. Charlie Crist's economists, referring to the booming economy in 2005. ``Now, if you count the District of Columbia, we're 51.'' Frank Williams, the Department of Revenue's chief economist, agreed: ``We're No. 1 in job losses. Absolutely.'' Were it not for employment gains in the health, education and the low-paying services fields, they said, the job-loss numbers would be far higher. Construction lost 77,000 jobs and manufacturing lost 23,000 in the last year. By month's end, the experts project, Florida's job-loss rate will be higher the nation's for the first time since 2002. Which leads us to another little problem for the Sunshine State. Smarter Bush's tax cut mania really caught on, especially with Florida homeowners, who have never missed an opportunity to lower their property taxes, at all costs. In January, Florida homeowners pushed through a constitutional amendment that slashed property taxes statewide, mostly for wealthy homeowners, by increasing the homestead exemption, while netting about $200 bucks for the average homesteader. But the pain from those cuts is now being felt statewide, as counties struggle to find places to cut. Take the Miami-Dade school system (the nation's fourth largest), which is struggling to slice $284 million from its budget to close a yawning deficit, without sending teachers to the picket lines. The county school board is considering everything from slashing its workforce to deleting school bus routes to close the gap. The county narrowly escaped cutting school police this week, when Superintendent Rudy Crew, who was apparently hoping to become Secretary of Education in a Hillary Clinton administration, according to a state official who asked not to be named, tabled a proposal to cut the force. Statewide, Floridians are seeing the real world cost of tax cuts in the parks that are having to close early, cuts to desperately needed affordable housing and economic development progams, and inevitably, future cuts to police and fire services and pension benefits.
Florida's legislature has already slashed $6 billion from the budget, which according to the state constitution, must be balanced. Most of that money has come out of the hides of schools, services for the elderly and the poor, and Florida's infrastructure. The state is busy privatizing roads everywhere it can, to pass more costs onto already burdened drivers, who are paying some of the highest gas prices in the country. Home prices in the state are cratering, and yet Miami-Dade County (the largest county in Florida) still has a glut of unbought homes and condos. Downtown Miami is dotted with silent cranes and half built high rises that are a soaring symbol of Florida's economic meltdown, which TIME Magazine recently chronicled in an article asking whether Florida has become the "Sunset State." And even with the glut of housing, Miami-Dade and other counties are in the middle of an affordable housing crisis and a foreclosure crisis (Florida is second only to California in home defaults.) Indeed, a new NPR/Kaiser Family Foundation poll shows half of Floridians struggling on multiple fronts: falling home prices, a credit crunch, and soaring fuel and food prices. (Low icome housing and worker's rights advocate Gihan Pereira, co-founder of the Miami Workers Center, this week called Florida "the canary in the coal mine," and indeed the state's troubles have been an ominous economic harbinger for the nation.)
Meanwhile, people are fleeing the state, which during the 1990s had among the strongest population growth in the country. Broward County, where much of the recent housing boom was centered, is losing population faster than any county in Florida.
And what can our fair governor, who has gone so far as to promise to hand over Florida's beaches to Chevron AND marry a woman in order to become John McCain's running mate, do to turn things (including his veep prospects) around?
Not much, say state economists.
"This time next year, we wouldn't expect to be a whole lot better than we are right now," said Amy Baker, coordinator of the Office of Economic & Demographic Research, who headed the economic estimating conference. "The question is, does it continue on beyond that, or does it start improving?" And Florida's prospects are further clouded by past failures, particularly during the Bush years, to invest in education, in order to create more potential high wage job earners, rather than relying on low wage service and tourism industry jobs to fill the bill. Florida continues to languish near the bottom in high school graduation rates (we have the sixth lowest rate in the U.S.), and according to the Alliance for Excellent Education, "if the dropouts from Florida's Class of 2008 had stayed in school and earned diplomas, the economy of the Sunshine State could have enjoyed an additional $25.3 billion in wages, taxes and productivity over those former students' lifetimes." The sad news for Florida is that the state for years was one of those "high growth, high poverty" states at the greatest risk of economic decline, and now that the decline has come, the state's tax cutting leaders have few cards to play.
Governor Crist promised last year that the latest tax cuts would, produce a real estate-driven "sonic boom" that would send Florida's economy into growth overdrive. It's turned out to be more of a sonic bubble. And it has officially burst.
| Labels: Charlie Crist, Florida, Jeb Bush, the Bush recession, u.s. economy |
