Florida Facing $2.5 Billion Deficit

I have on numerous occasions about how Florida Republicans will let the state go broke before they raise taxes. Their decision to call off the special session was reckless.

Amy Baker is the director of the Florida legislature's Office of Economic and Demographic Research. She gave this stern warning to the legislature.

"We assume that Florida is very near the bottom of the housing market slowdown right now and that we'll stay at this level all the way through the beginning of 2009," Baker told a legislative committee Monday.

Baker repeated her warnings that, if unaddressed, the state would face a $2.5 billion shortfall next year -- about 8 percent of the state's revenue.

"That's an historic adjustment," she said. "That's a higher adjustment than we've ever had to make."

Republicans believe George H.W. Bush because he reneged on his promise not to raise taxes. Bush 1 lost because he was an inferior candidate to Bill Clinton and Perot took votes away from him. Nevertheless, Republicans have an allergic reaction to tax increases. They prefer to put the burden on counties and create new taxes.

The question journalists should be asking Charlie Crist, Marco Rubio and Ken Pruitt is how come the tax cuts are not creating a trickle down effect? The housing bubble popped, construction work is down and the state is facing a deficit. I like to hear them explain how another round of tax cuts will dig the state out of debt.

Side note: Jonathan Chait has a good article in New Republic on how the Laffer Curve took over the Republican Party.