Jeb using big bros' -fuzzy math- to cover up FLA's budget crisis!

Tax cuts generated billions for state, Gov. Bush says By S.V. Dáte, Palm Beach Post Capital Bureau Saturday, August 18, 2001

TALLAHASSEE -- With a half-billion-dollar budget deficit looming just a month away, Gov. Jeb Bush's office has put a dollar value on how much of the state's $3.4 billion in new tax receipts over the past three years can be credited to his tax cuts: Every dime of it -- a stance that has some economists scratching their heads.

The claim came in response to Democratic accusations that the likely $400 million to $800 million shortfall this autumn was caused in part by the $1.6 billion in "recurring" tax cuts that Bush and the Republican-controlled legislature have approved since 1999. Bush budget chief Donna Arduin wrote in an Aug. 2 letter: "$1.6 billion in tax cuts have yielded an average 4.1 percent annual increase in state tax revenues." Bush has repeatedly credited the tax cuts for increasing state revenue and used the 4.1 percent figure in an Aug. 5 letter to the editor of The St. Petersburg Times.

But an analysis by The Palm Beach Post of a spreadsheet from the Bush budget office shows that the 4.1 percent figure does not include other factors -- such as an increasing population -- that contributed to Florida's economic growth. It calculates that all of the increase has been caused by the tax cuts. "There's no way you can make any sort of analysis using just one data point," said Florida Atlantic University economics professor Sharon Lassar, an economist who, like Bush and Arduin, subscribes to the "supply side" theory that lowering tax rates actually increases total tax revenues.

Just looking at total tax receipts, however, is of little value, said Lassar, who reviewed the spreadsheet provided by Bush's office. "It doesn't support either side."

Arduin did not return numerous calls for this article, and Bush did not return a query via e-mail. Both have vigorously defended the tax cuts, approximately half of which have benefited the wealthiest 5 percent of Floridians through reductions in the "intangibles" tax on stocks and bonds. Another 25 percent benefited property owners, while the remainder went toward various special-interest tax breaks.

While many legislators and staff members are estimating the state will have between $600 million and $800 million less in tax receipts than originally expected, Bush's office has said any reduction would be far smaller. The difference would be politically explosive in an election year. The smaller deficit could be dealt with by the executive agencies and the Cabinet in concert with the Legislative Budgeting Commission. If the number exceeds $470 million, however, the legislature would either have to make wholesale cuts in the budget or dip into the state's emergency fund when it returns to Tallahassee in January.

"It's bad," said Sen. Ken Pruitt, R-Port St. Lucie and chairman of the Senate Finance and Taxation Committee. "I believe the legislature will have to act."

"Bush and the Republican leadership have an addiction to wasteful tax cuts," said House Democratic Leader Lois Frankel, whose letter to Bush prompted Arduin's response that relied on the 4.1-percent figure. "I dismissed that analysis as political rhetoric," she said.

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