FLORIDA'S FISCAL FOLLIES

March 11, 2010

by Al Doyle

With a history of boom and bust cycles, Florida is a textbook example on how irrational exuberance and excessive debt can come crashing down in a painful way. Here are some recent tales of economic woe from the sunshine state.

The South Florida Sun-Sentinel reports that over 2.5 million Floridians are currently enrolled in the food stamp program, and that number is more than double the 1.2 million recipients in 2007. Department of Children and Families secretary George Sheldon says the state's growth rate in demand for food stamps is the fastest in the nation.

To be eligible for food stamps, a family has to earn 133 percent or less of the federal poverty level. That works out to a maximum of $29,000 a year for a family of four.

Even though his home was foreclosed in 2003, Jeffrey DeMauro and his family are still living there. The Pinellas County resident has declared bankruptcy 11 times to stave off the loss of the home.

"Though an extreme example, the couple's story is an increasingly common one among distressed Tampa Bay homeowners," writes Tampa Times senior correspondent Susan Taylor Martin. "Hundreds, perhaps thousands are staying in their houses long after defaulting because they declare bankruptcy, challenge the foreclosure or simply sit back as the cases grind their way through an overloaded court system."

In Pinellas County, 485 of 1019 people with home scheduled for auction in January or February still retained ownership at least a year after foreclosure proceedings began. Of that number, 178 had remained in a foreclosed property from two to six years. Paul and Sharon Stenstrom of Palm Harbor have remained in a foreclosed home since 2002 thanks to nine Chapter 13 bankruptcy petitions.

So what happens to financially conservative Floridians who bought homes they could afford? They are being punished for their logical and intelligent actions.

As housingdoom.com reports, "If you have not lost your home to foreclosure, get ready to pay up.Hernando County, Florida has announced plans to raise fees on homeowners who make repairs to their properties or do home improvements. Everything from roof repairs to replacing an old water heater will be hit with higher fees. . .Ah, the sad cost of fiscal responsibility." The foreclosure epidemic has reduced Hernando County's property tax receipts by $5 million.

Polk City, Florida - population 1827 - has defaulted on a $1.7 million note to Polk County and owes the county at least $539,055 for construction impact fees collected since 2006. The small town had a deficit of $612,129 in 2007 and faces a shortfall of at least $500,000 in the current budget.

One of the main reasons for financial distress among government entities is the generous wage and benefit packages paid to public employees. Using Polk County as an example, full-time private sector workers earn an average annual salary of $34,709. The county pays its full-timers an average of $37,204, while state workers come in at $38,212. Federal employees are paid an average of $53,129.

Pensions and benefits are the real budget buster. The average of $16.83 per hour for state and local government is87.2 percent higher than the $8.99/hour average in the private sector.