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Time for local government to step up or step out

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By The Staff

While there has been some positive economic news on the national front and optimism out of Washington, our state and local economic outlook remains bleak.

A new report on the economic health of small businesses for Florida rules out a rapid recovery. In fact, the author, Dr. Rick Harper, director of the University of West Florida HAAS Center for Business Research and Economic Development, points out that our slowing population growth, and now the national recession, has us looking at an unprecedented fourth consecutive year of falling retail sales. The result is a declining ability by government to fund health and human service programs, education and criminal justice needs.

That trend is further explored by the latest Florida forecast out of the University of Central Florida’s Institute for Economic Competitiveness. It points out that our traditional economic engines – population growth and housing – have been choked off by the recession. Plus, consumer spending will not be much help toward recovery as recession-scarred residents direct any extra household income toward restocking retirement accounts or paying off debts.

That study also foresees a worsening fiscal crisis for both state and local governments. At the state level especially, cuts in services and programs will be followed by more cuts. And effective sweeping measures for new revenue are unlikely.

Of course, there will be no serious clamor for a state income tax – no significant reductions of sales tax exemptions, no expansion of taxes on services and no serious attempt to collect more taxes on Internet sales. Instead, the fees collected will go up for almost everything that passes as a government service, permit, license or fine, at all levels.

Cities, counties, regional authorities, special taxing districts and school districts will turn to their constituents to close the revenue gap. So the trick for government officials and budget controlling bureaucrats will be to try and spur local economic activity to run ahead of its costs.

In other words, our cities, towns, districts and counties have to generate and encourage at least enough commerce for businesses to pay for government, maintain their employees and occasionally reinvest in the community.

If local government can help that process until the economic recovery begins, fine. If not, it should stay out of the way.