Many states across the country are facing a dire fiscal situation, tax revenue is shrinking and state deficits are rising. In Florida, the deficit is now around 1.5 trillion. New Governor Rick Scott is seeking to increase overall tax revenue by slashing taxes, relieve the tax burden on business and create new revenue by reinvigorating the economy. Unfortunately, making broad tax cuts is politically difficult with the state’s budget situation.
Christian Camara, Heartland’s Florida Director at the Center on Finance, Insurance and Real Estate had a letter published Monday in the Palm Beach Post which proposes another method Governor Scott can use to take some of the financial burden off Florida businesses, reduce funds spent on the state’s residual wind insurer Citizens and the states hurricane catastrophe fund. Cutting back on these programs will remove billions in liabilities from the state.
Christian’s letter, “Target catastrophe fund, Citizens to ease biz burden,” was originally published in the Palm Beach Post Jan 24, 2011 and is printed below.
Target Catastrophe Fund, Citizens to Ease Biz Burden
By Christian Camara
Given Florida’s tight fiscal situation, it may be politically difficult for the Legislature to approve the broad tax cuts that Gov. Scott wants (“Senate prez dashes guv’s hopes for biz tax cuts,” Jan 1
But legislators wanting to relieve the burden that government places on businesses shouldn’t give up hope. The Hurricane Catastrophe Fund and Citizens Property Insurance Corp. impose multibillion-dollar liabilities on the state, and limiting their reach could, following a major storm, save billions for businesses and individuals alike. If the Legislature can’t make broad-based tax cuts, reductions in Citizens and the catastrophe fund are the next best thing it could do.
Editor’s note: Christian Camara is Florida director of the Center on Finance, Insurance and Real Estate at the Chicago-based Heartland Institute.