Florida Awaits BP Budget Fallout

 

Florida could become the first of the Gulf states to call a special legislative session to address problems caused by the BP oil spill. State leaders appear increasingly supportive of meeting next month to discuss emergency response measures, including property-tax relief for those affected by the disaster and a possible constitutional amendment to ban offshore oil drilling.

Republican state legislators had been opposed to a special session, but that seems to be changing, according to The St. Petersburg Times , which noted that "election year politics are giving way to economic reality."

One item that could quickly find its way onto the agenda for any special session is budget-cutting. By the end of this month, Florida economists will get their first look at tax-revenue numbers from June, and the news is expected to be ugly. It's causing more alarm in Florida than in other states affected by the disaster, since Florida has no income tax and relies heavily on sales taxes paid by tourists, many of whom have stayed away since the spill.

"It is going to be a catastrophe sales tax-wise," one restaurateur told The Times . "This was going to be our comeback year. It is the hurricane we have not been able to prepare for."

Similar concerns are being voiced in other Gulf states. As Stateline reported last month , "B eleaguered budget officials (along the Gulf Coast), who badly overestimated revenue in the last two years as the national economic downturn deepened, now are facing the unexpected challenge of forecasting tax collections in the midst of a fickle environmental calamity that could last several years. "

The Wall Street Journal reported last month that Gulf states already are seeking compensation from BP. Alabama's education superintendent, for example, wants to charge BP for lost income and sales-tax revenues that provide about 90 percent of the state's $5 billion annual schools budget. Florida Attorney General Bill McCollum, who is running for governor, has asked that the company deposit $2.5 billion into an account to help cover expected losses in revenue.

 

 
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