A Times Editorial
St. Petersburg Times, published August 25, 2001

Jeb's voodoo economics

With Florida facing a budgetary bind after three years of celebrated tax breaks, Gov. Jeb Bush has offered what amounts to so much economic malarkey Not only do the $1.6-billion in recurring annual tax breaks bear no blame for the impending shortfall, says the governor, but they are in fact solely responsible for generating $3.4-billion in new state tax receipts over the period.

"Our $1.6-billion in tax cuts over three years has yielded a 4.1 percent average annual increase in tax revenue," writes Bush, "because it is better to collect a smaller percentage of a larger pie than a larger percentage of a smaller pie."

Let's be charitable and call this pie half-baked. Bush's assertion is so preposterous that even a supply-side economist from Florida Atlantic University was forced to shake her head in puzzlement. Handed a copy of the governor's budget office spreadsheet that details his case, economics professor Sharon Lassar told the Palm Beach Post that, "There's no way you can make any sort of analysis using just one data point."

Indeed. Bush would have us believe that no other factor, such as the state's continuing population increase, contributed to an overall increase in tax collections. He would have us believe that a sales tax holiday for back-to-school clothing purchases would actually result in an increase in sales tax collections.

Bush's claim might be harmlessly amusing if it weren't so typical of his approach to governing. When he was criticized in 1999 for pushing a school voucher system that could take away money from public schools, his budget analysts countered with a convenient retort: Such vouchers would not cost taxpayers a dime. When he was derided this year for providing so little money for public schools, he touted an increase of 6.3 percent. Yet legislative budget analysts readily admit the 6.3 percent figure is misleading. It counts $113-million that was previously budgeted in a separate category and $177-million to cover new students. A more accurate number is 1.3 percent.

Making sound decisions as governor depends on using sound information. Economic analysts are projecting a $400- to $800-million shortfall in tax revenues for next year, and the state is not likely to respond appropriately if it accepts the fiction that tax breaks have produced increases in tax revenue. If Bush's claim were correct, then he would want to fight for even more tax breaks so tax collections would presumably soar. Thankfully, most lawmakers know better.

Some two decades ago, while seeking the Republican Party nomination for president, Bush's father, George H.W., offered a less-than-flattering description of Ronald Reagan's supply-side economic plan, the centerpiece of which were massive tax cuts. He called it "voodoo economics." Now, more than two decades later, the governor is peddling his version of tax-cut voodoo.