George Gibbs Center for Economic Prosperity

USA Today — S⁠t⁠a⁠t⁠e governmen⁠t⁠ becom⁠i⁠ng ⁠i⁠ncreas⁠i⁠ngly affordable

By: Guest Author / 2015

USA Today
“State government becoming increasingly affordable”
April 15, 2015
By Dr. Randall HolcombeFiscal horror stories from populous states like Illinois, California and New Jersey are becoming all too common these days, but Florida’s finances have yet to make the front pages of the national news. In an era when state governments are growing, and many strain to merely pay for past commitments, Florida has stood out for its fiscal responsibility.In a comprehensive new study published by theMercatus Center at George Mason University, I document just how remarkable this is. The Sunshine State certainly has policy areas of concern — including homeowners insurance, land use regulation, pension accounting and rising health care costs. But for two decades, we’ve had a balanced budget without raising taxes, and have in many cases cut them.Florida’s state government appropriations as a percentage of Gross State Product (GSP) peaked in the 1994-95 budget at 11.86 percent. In the two decades since, this number has steadily declined to 10.38 percent in 2000, 9.89 percent in 2007, and 9.26 percent in 2014.State government employment shows a similar trend, peaking at 1.25 percent of the state’s population in 1995, and declining to 0.95 percent by 2012, the lowest percentage in the nation. In his latest budget, Gov. Scott has proposed cutting more than 1,000 state jobs — most, but not all, of which are vacant today. This move has spurred controversy, but critics and advocates agree that Florida’s state government has taken a fiscally conservative turn over the last few decades.While other states (and the federal government) grappled with ways to raise taxes and maintain spending growth, Florida chose to live within its means, holding the line on taxes and reducing spending to match the decline in revenues.Our well-deserved reputation as a small-government state leads some to argue that we lose out on government services, so not everyone is happy about this. But while we are spending less on state government, are we really getting less?As a Floridian with three children who graduated from Florida high schools, and two who attend our state universities, I have been satisfied with the quality of their education. I sometimes get tied up in traffic, but don’t find our congestion (or other public services) worse than big-spending states like California, New York or Illinois.Regardless, Florida’s government seems to be giving its citizens a good deal. Spending less for what you get is desirable. Critics can argue that we should spend more, and in specific cases, they may have an argument. But we should be grateful that our leaders have resisted the spending temptations that are so harmful in other states.Randall G. Holcombe is DeVoe Moore Professor of Economics at Florida State University and senior fellow at the James Madison Institute in Tallahassee.Article: