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Nancy Smith

Profile of a Sinking Blue State, or Why Florida Dodged a Bullet in Election 2018

December 12, 2018 - 6:00am
Illinois State Capitol and Florida State Capitol
Illinois State Capitol and Florida State Capitol

On a day when an editorial in the venerable Chicago Tribune newspaper is making national news for pleading with Illinois lawmakers to clean up the state's fiscal mess, it's a good time for Florida to count its blessings.

There but for the grace of God and a slew of successful conservative policies ...

The Sunshine State barely avoided a great big fiscal rathole of its own on Election Day by rejecting progressive leadership and the prospect of turning a sound red state blue. Maybe not Illinois blue, but a Gillum victory likely would have started the Sunshine State down Insolvency Road. The James Madison Institute report published in October told us that.

Right now, on the basis of its solvency in five separate categories, Florida ranks 4th among U.S. states for fiscal health, behind only Nebraska, South Dakota and Tennessee.

I Beg to DifferIllinois, on the other hand, ranks 50th -- dead last and apparently in real trouble.

Next month Democratic Gov.-elect J.B. Pritzker will take office alongside the Democratic-controlled Illinois General Assembly.

Tribune editors quote a recent report by Fitch Ratings: "Illinois has exhibited a 'lack of coherent fiscal policymaking over many years' and is guilty of 'irresolute fiscal decision-making'," they write.

Editors explain the facts in the Prairie State: "The costs of lawmakers’ recklessness are borne in many ways. Springfield raised the state income tax by 32 percent in 2017, and still Illinois can’t keep a balanced budget. The current fiscal year is about $1.2 billion out of whack. And despite issuing bonds to pay some unpaid bills, there’s still a backlog of about $7 billion in, yes, unpaid bills. The state is making payments to the pension system, although not as much as actuaries say is necessary, so the shortfall rises. The pension system, which includes government workers and many of the state’s teachers, should be 90 percent funded. Instead, it’s about 40 percent funded."

In another set of rankings released Oct. 29 -- these from George Mason University's Mercatus Center -- compare No. 4 Florida's rankings in five categories with No. 50 Illinois' rankings in the same categories:

  • Cash solvency measures whether a state has enough cash to cover its short-term bills, which include accounts payable, vouchers, warrants, and short-term debt. (Florida ranks 4th; Illinois 49th)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Florida ranks 6th; Illinois 46th)
  • Long-run solvency measures whether a state has a hedge against large long-term liabilities. Are enough assets available to cushion the state from potential shocks or long-term fiscal risks? (Florida ranks 17th, Illinois 49th)
  • Service-level solvency measures how high taxes, revenues, and spending are when compared to state personal income. Do states have enough “fiscal slack”? If spending commitments demand more revenues, are states in a good position to increase taxes without harming the economy? Is spending high or low relative to the tax base? (Florida ranks 5th; Illinois 14th)
  • Trust fund solvency measures how much debt a state has. How large are unfunded pension liabilities and OPEB liabilities compared to the state personal income? (Florida ranks 7th; Illinois 46th)

Says the Mercatus report, "Florida has between 4.80 and 5.81 times the cash needed to cover short-term obligations, well above the U.S. average. Revenues exceed expenses by 7 percent, with an improving net position of $277 per capita. In the long run, Florida has a net asset ratio of 0.12. Long-term liabilities are lower than the national average, at 31 percent of total assets, or $2,199 per capita. Total unfunded pension liabilities that are guaranteed to be paid are $253.01 billion, or 27 percent of state personal income. OPEB are $20.55 billion, or 2 percent of state personal income."

Even the Washington, D.C.-based Cato Institute, in an August report, called Florida the freest state in the nation. The Cato study ranked each U.S. state by “how its public policies promote freedom in the fiscal, regulatory, and personal freedom spheres.”

The Sunshine State earned seven top-10 rankings, including four No. 1's -- in the Overall, Fiscal, Economic and Cable categories -- in the 2018 edition of "Freedom in the 50 States," produced by the think tank.

"Floridians should be proud of their No. 1 ranking,” study co-author William P. Ruger wrote. “Florida’s leaders have largely avoided restrictive policies that have harmed economic growth in other states while making opportunity-enhancing reforms that have benefited current residents and the hundreds flocking to the state each day.”

The bottom line is, all states perched on a fiscal cliff, no matter whose ranking you go by, are deep blue and far left. Besides Illinois, the danger zones are Connecticut, New Jersey and Massachusetts. If it's limited government, personal responsibility and economic freedom you value, these four states are unlikely to tempt you.

Oh, yes -- and at the same time the Tribune's editorial about Illinois was hitting its mark, Florida Chief Financial Officer Jimmy Patronis was announcing more good news for Florida -- that Standard & Poor Global Ratings raised the fund quality rating on the Florida Treasury Investment Pool to AA- from A+. S&P cited the pool’s strong exposure -- the quality of investment, comparison with other funds with similar composition, and sound management by CFO Patronis’ Division of Treasury as the reasons why they made this change. 

“Today’s news that S&P raised our Treasury Investment Pool’s credit rating to AA- is a testament to Florida’s fiscal responsibility and strong asset management," Patronis said. "Even more importantly, our elevated credit rating put us in a stronger position to manage your taxpayer dollars. Better returns on our investments can keep taxes low and you can keep more of your money." 

The CFO said it will continue to be his policy to diversify investments smartly and responsibly, including partnering with Israel to invest $40 million in Israeli bonds and supporting Florida’s allies.  

"The Treasury Investment Pool is valued at approximately $24 billion", Patronis said. "Money into the Florida’s treasury comes from state agencies by way of fees and other taxpayer dollars, and is used primarily to pay the state’s bills, including payments to vendors and running the state government." 

Meanwhile, the Tribune ended its editorial less with a ring of hope than a ringing shot at the status quo. "We’ve heard (Gov.-elect Prizker) talk about raising revenue by shifting the state to a progressive tax rate that can extract more money from higher-income earners. That idea strikes us as no panacea. It’s easy to demand more money from taxpayers. It’s also easy to continue borrowing money. Both would weaken the state, and then weaken it further by driving employers elsewhere."

Which, fortunately, is what Florida Republicans have said for the last two and half decades. My thanks to the Tribune for the reminder.

Reach Nancy Smith at nsmith@sunshinestatenews or at 228-282-2423. Twitter: @NancyLBSmith

Comments

There is no doubt that Florida dodged a financial bullet this election, however as a self described pessimist, I see the blue wave eventually swallowing us all, the lure of “free stuff” and the ever-increasing attitude of “it must be somebody elses fault”, and “why should I work, it is the government’s responsibility to take care of me” just too powerful for the younger generation to ignore. The democrats know this and use that proclivity to their advantage. As must happen with Illinois and California, eventually the house of cards will topple but we can kick the can down the road just a little further and hope Uncle Sam will bail our sorry butts out when that eventuality takes place.

A new resident of Florida I am so blessed to be in this state. California is a hole in the wall, was a beautiful state and now in ruins. Next and Future election remember what those blue states are doing to their people, Remember France and the Yellowjackets.... Vote RED, as a libertarian I don't care how you live your life, just don't impact mine... Maintain the constitution -Life, liberty and pursuit of happiness and WE will be happy.

Sounds like the upper .01% are happy. The rest of us are not. Would suggest the the "James Madison Institute" is a Koch sponsored entity, and only one, very biased, source of information on economics. https://www.sourcewatch.org/index.php/James_Madison_Institute

IT IS FAR BETTER TO ELECT THE RADICAL RIGHT AND TO END UP IN A GHETTO, AS BEING IN THE WATER WITH NO LIFE PRESERVER.

I'm so proud of our adopted state of Florida. I cry for my native state of California and can only hope the CA voters there can see their way clear to turn the ship around while they are still able to do so. I'll work as hard as I can to ensure we keep Florida Red forever. There are so many forces here who are bent on turning Florida into "Little California". Sanity must prevail but it won't unless we give freedom the good fight daily. That is as true today as it was during the Revolutionary War.

With a million+ felons voting in 2020 and beyond, Florida should become a reliably Democratic state. Before you know it Florida will become another California.

There are plenty of Trump fans in that former felon voting block. I wouldn’t worry about that.

I can testify that Florida is a much better state to live in than Illinois. As an Illinois resident I am suffocating from the over regulations and over taxation. Naturally there are problems in every state but Illinois is the most corrupt state as far as it’s lawmakers and governors. Many of our governors have either been indicted and serve jail time. The liberals in this country have thrown away their moral compass, turned from God, and now swim in all the evil ideas that they force on us. Except for Chicago and the lawmakers in Springfield most of the people in Illinois are good God fearing people with a generous heart. But the ones in charge and most of Chicago, which runs the state from their, are just as crooked as the freaks in Washington D C. As soon as we can we are moving back to Florida to get away from the liberal lunatics that run our state.

Chuckle, chuckle, chuckle. Great. Fourth on "fiscal health". Forty-fifth in terms of insured "personal health"!

It's not my job to provide your lazy a$$ or anyone else with health care. But heres a fact dumba$$, NO ONE CAN BE REFUSED HEALTHCARE. Its insurance people dont have. get an education before shooting off your obvious uneducated cake hole

Where did you get that bogus information? Under EMTALA, the Emergency Medical Treatment and Active Labor Act, IF a hospital accepts payments from the Department of Health and Human Services, the Centers for Medicare and Medicaid Services under Medicare, the emergency departments are required to screen anyone that comes in regardless of ability to pay, citizenship, or legal status, and can't discharge them without informed consent, treatment, or stabilization and transfer to a more appropriate facility if they aren't equipped to handle the problem. The problem has to be an emergency medical condition, which is considered as ""a condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in placing the individual's health [or the health of an unborn child] in serious jeopardy, serious impairment to bodily functions, or serious dysfunction of bodily organs.". You walk in and say my foot hurts, they'll look at it, and if you're not in severe pain, it's not broken, doesn't have a foreign object in it, or a bullet hole, you'll be lucky to get a couple of aspirin. I'm a retired registered nurse. I worked open heart recovery and cardiac intensive care, but occasionally we did get pulled to the ER and they'd go over this stuff with us every time. If you need emergency care, yes, you'll get it. In a real emergency we aren't asking anybody for anything except what's going on and if they're allergic to anything, if they can talk. Our first mission is saving them. We did neuro and open heart so we didn't have to worry about getting someone stabilized to transfer, just to the OR. So yeah, if you're in an emergency you can get healthcare. You can't just walk in a clinic and get treatment. If you have a sore throat you'll likely get a rapid strep. Positive, you get some healthcare. Negative, you may get those aspirin and told to gargle with warm salt water. You got a free test and 4 cents worth of pills.

Show me where any kind of health care is a right to be guaranteed by the state. That,s right you can't.

Thank you! For being the voice of reason. As an legally adopted USA citizen since 1960 I have seen it all and are very aware of the danger of socialism.

There were no illusions that Gillum would have been able to cast his radically progressive agenda on Florida with a Red legislature. The fact that he was so close to winning should tell you something about the state of FL politics. It is so radically right, that it has caused people to actually consider electing someone with that agenda. Our water quality is terrible, our schools are broken, most government services underfunded or not at all. I long for a state that has balance. You can still be fiscally responsible and fund the right things and properly. I would start with all of the aforementioned items before there was ever even the slightest talk of gov't handouts and tax cuts for big business. Most true Floridians long for the days of balance within their beloved state, instead of radical agendas both ways by industry props from the midwest and other places that have no vested interest in our state's future other than to make more money for their retirement accounts for themselves, their friends and their masters. I guess that is why us Independents are the fastest growing party FL and America...

There is no excuse to have a Socialist Program in place anywhere in this Great Country of America. Gillium would have been Obama the criminal muslim on steroids, and with Hillary continuing the onslaught . Reader, you never said anything about the cheating in Palm Beach County by a typical assigned black female, that had already cheated in past elections, and you laughed because she leaned your way, and you gave her candy, a raise, a slap on her middle finger to the American's of Florida? When you get a chance to go to high school, please look at and read, and understand "The Constitution" during your American & History Classes? There just seems that there is a nasty nest of Democrats in Palm Beach and a few other counties, who if Gillum were elected, the county elector would have been raised to Attorney General of Florida, and given a home on a canal in Miami? Everything that is still terrible in Florida will be removed by truly able people, the Republicans, after Obama RAPED this country in everyway un-American for 8 YEARS ! Obama and Hillary Clinton are and were the biggest enemies to American's.

I think you missed something, or at least I hope you did. I blamed both parties and clearly said I was Independent. I'm glad the Broward Supervisor of Elections was replaced. Just so you are aware, there was Red cheating in GA. and NC, so it is not just confined to Dems. I would hope you have a chance to get your GED and learn to spell sometime in the future. You clearly never made it that far. I hope you find peace somewhere from your radical agenda. There is a world full of knowledge out there if you will just seek it out for yourself. I have a PhD, have 7 published texts, and am tenured, so high school is long since past friend, especially "American & History classes". I did my thesis on the Constitution, so I could lecture you on it in my sleep. Best of luck at 7-11, you will clearly need it...

Very good comparison between a blue state and a RED state. Red states are not only fiscally healthy but morally and spiritually healthy thanks to solid, patriotic Republicans leading the way. You can make this comparison across the board on blue V. Red and find similar results. The Dems only hope of changing this trend is open borders and more welfare states and they know it.

So Proud to call Florida my home - by choice - and to live in a state that puts effort into fiscal health. I'm also grateful for Ron DeSantis and Senator Scott, but state Republicans really need to concentrate on educating voters over the next 4 years. It's imperative.

Great article--It was very scary that we almost got Andrew Gillum, a socialist, as our governor. I can't believe how close this election was considering the fiscal health of our state thanks to Governor Rick Scott and our Florida Legislature. To me it just shows that voters are clueless and will vote along party lines for someone with a great smile and a bunch of false promises. They discounted his FBI corruption probe and crime that had risen by 58% in his city while he was mayor. It was way too close for any comfort and Republicans need to get to work, spread their word/achievements at every opportunity so that a Gillum never happens again.

Not to mention the rampant voter fraud in some "liberal" counties.

Thanks, Nancy for this timely column...I knew that Illinois was in terrible fiscal shape along with Connecticut...and I knew that Florida was in excellent fiscal condition, but I didn't know our real ranking...thanks to a Republican legislature and Republican Governors for lowering taxes and keeping Florida a very attractive state to do business in!

Comments are now closed.

nancy smith
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