Gov Rick Scott’s plan to reduce property taxes levied for school spending could hurt the state’s schools ability to respond to class size mandates, an international rating agency reported Thursday.
Further, Moody’s Investors Services, a New York based rating agency, said Scott’s plan to reduce property taxes and corporate income tax comes at a time when the state is facing a $3.6 billion gap despite repeated belt tightening exercises over the past several years.
“The plan incorporates expenditure savings in most of the state’s major policy areas, but school districts statewide would feel the largest burden because of local property tax reductions and the loss of federal stimulus education funds,” Moody’s wrote. “The corporate income tax rate would also be reduced and eventually eliminated, although Florida already has one of the lowest corporate tax rates in the country and there is no personal income tax.”
Responding to the Moody’s analysis, Scott said his proposal over the long haul will reduce government spending and result in a more rigorous economy that would offset the reduction in property taxes and corporate taxes.
“I’m very comfortable that the things we are doing are the things that will make this state a long term success,” Scott told reporters Thursday. “If you look at my business history, I’ve tried to put the companies I’ve been involved with in better financial shape. I’m trying to do the same thing for the state.”
Florida is exceeding a self-imposed 7-percent, non-binding, cap on state bond debt.
“Reduced revenue creates additional challenges to achieve a structurally balanced budget after several consecutive years of spending cuts,” Moody’s reported. “Like many states, Florida reduced expenditures and drew on reserves over the course of the recession.”
The News Service of Florida
