>> Lowering Florida’s already low taxes will not be enough to induce businesses to set up corporate headquarters in the state. A skilled workforce, good transportation infrastructure and a wealth of cultural and recreational amenities will outweigh low taxes and cheap labor as deciding factors in where companies locate their corporate offices. The decision of Jet Blue to remain in New York instead of relocating to Orlando indicates that taxes are only a marginal consideration. -- Orlando Sentinel: Lower taxes not key to luring business (Beth Kassab), 20Jan2011 >> Tax breaks to create jobs will be a zero-sum game, with the Florida Legislature deciding who wins and who loses. Tax cuts are another type of government spending and because the state budget must balance, spending money for one purpose means spending less for another. The benefits tend to favor the politically well-connected companies and industries. The losers tend to be the public sector and the small businesses that lack clout in Tallahassee. --Florida Center for Fiscal and Economic Policy: Tax breaks shift money to a few winners and compete for limited state revenue (Alan Stonecipher), April 2010 >> Muni bond rating downgrades will make big job-creating public projects more expensive to finance. S&P, citing Miami’s pension costs and unwillingness to raise taxes, lowered the rating for general obligation bonds – usually backed by property taxes – from A+ to A, and the rating for bonds backed by other revenues from a to BBB+. More costly public works projects will complicate the efforts of local governments to cut expenses and balance their budgets. S&P’s action, following an earlier caution from Moody’s, reflected doubts that Miami will be able to do serious cost cutting. -- Miami Herald: Standard & Poor’s downgradesMiami bond rating by two notches. (Patrcia Mazzei), 17June2010 >> Continuing slump
in commercial real estate will mean higher borrowing costs for local
governments in Florida
over the next few years, according to Fitch Ratings. With high unemployment and
weak consumer spending, the market for hotels, retail stores and office
buildings will be slower to recover than in a normal economic cycle. For now,
the municipal bonds most at risk are those backed by tax and other revenues
from shopping malls and office buildings in resort and retirement areas. With a
protracted downturn, problems could broaden to include bonds backed by general
hotel or sales tax levied by cities and states. After Orlando
reported an 8 percent drop in hotel occupancy rates in 2009, Fitch downgraded
to junk about $220 million worth of bonds backed by hotel and other
tourism-related taxes. –- Financial Times: Property
slump adds to US muni woes (Nicole Bullock), 02Aug2010 |
Tax Policy and Politics |