by Max Marbut
Staff Writer
Lately, there has been no shortage of discussion on all levels about the current state of the local, national and global economies. From the living room to the board room, to the halls of Congress and headquarters of commerce worldwide, the fluctuations in markets and currencies are making daily headlines.
“It is easy these days with all the political and economic noise to become distracted and not think logically and strategically,” said Davis College of Business Dean Joe McCann, who then asked: “At what point do we start to think more proactively?”
McCann introduced the first installment of Jacksonville University’s new “Thought Leaders” series Thursday at the college.
The series’ first guest speaker was Florida Chief Financial Officer Alex Sink, who shared her thoughts not so much on Florida’s current monetary issues, but on how the state can position itself to weather the current economic storm and prepare for the future.
“Clearly, we are in difficult economic times. It was no surprise to any of us when the economists said last month that Florida has been in a recession since December of 2007,” said Sink. “But those of us who have been around Florida for a while know the whole history of our state back to before the 1920s has been one of boom or bust. The nature of Florida is that we live through boom or bust – but this time the bust will be much deeper.”
Sink also said Florida has not felt the effects of the national recession as much as other states, even with the high number of real estate foreclosures that have occurred and will continue in the coming months.
“Aside from the sub-prime (mortgage) crisis last year, Florida’s economy was looking good. There were new jobs and our unemployment rate was below the national average.
“There were two things that carried us through the first half of last year. One was tourism, especially in the South Florida markets. The second ... was exports. You might not think of Florida as an export state, but we’re the third-largest state exporter of high-tech products in the country. We export computers, computer equipment, electronic components and lasers – that trade is a really important part of our economy. Trade and foreign investments account for one-third of our jobs in rural Florida,” she said.
As for the future, Sink noted despite recent reductions to the state’s education budget authored by the state legislature, Florida must continue to educate its children if high-tech, well-paying jobs will be part of Florida’s future. Financial literacy will also be a critical skill, especially based on recent past performance.
“In terms of the sub-prime crisis, it happened because people wanted to believe what they had heard but they really didn’t have the knowledge abut how to deal with their financial affairs. Students need to take a financial literacy course before they finish high school. It can even be done online now. We can’t repeat a sub-prime mistake again in our lifetime, so we need more financial education,” said Sink.
While it’s too soon to predict how Florida will deal with next year’s budget, Sink said “all revenue sources need to be on the table.” When asked if she thinks the state may be headed toward a personal income tax, Sink said she doubts the voters would approve such a measure on a referendum, but additional fees and taxes will be looked at to increase revenue.
“Penalties and fees charged by state government haven’t increased in more than 10 years, but the cost of regulation has increased tremendously. Florida has some of the lowest taxes on cigarettes in the country and additional tobacco taxes could raise $1 billion a year. That money could be used to fund health care and we know from the experience of other states, additional taxes also reduce smoking, particularly among young people,” she added.
Another point made was that the people of Florida, its businesses and lawmakers will have to work together to sustain Florida’s solvency and economic growth. “It’s not a Republican or a Democratic problem, it’s a people of Florida problem,” said Sink.
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