TALLAHASSEE The fiscal condition of Florida's state government is in good shape as evidenced by a new study that ranks the state sixth overall in the nation, though there are some limitations with the report's findings, according to Florida TaxWatch.


TALLAHASSEE  The fiscal condition of Florida's state government is in good shape as evidenced by a new study that ranks the state sixth overall in the nation, though there are some limitations with the report's findings, according to Florida TaxWatch. 



Click here for a copy of the report provided by Florida TaxWatch>>



"Florida continues to manage its finances very responsibility," said Dominic M. Calabro, president and CEO of Florida TaxWatch, the independent, nonpartisan, nonprofit taxpayer research institute and government watchdog organization. "This report is further evidence that Florida's fiscal house is in order.



Florida's top ranking from the study is consistent with the state's excellent bond ratings, such as a "AAA" rating from Standard and Poor's, the highest rating available. A good indication of financial health, the state has received the top rating since 2005.



While the analysis of the report by Florida TaxWatch yielded a similar conclusion, it also raised some questions.  Florida's high ranking in cash and budget solvency is not surprising, due to state's significant cash reserves, the balanced budget requirement in the Florida constitution, and the way the legislature dealt with the revenue shortfalls during the recession.



However, Florida's low long-run solvency ranking is surprising, as Florida has the fifth-lowest combined tax supported debt and unfunded pension liabilities in the nation. Florida's number two ranking in service-level solvency is likely over-estimated by the report, and TaxWatch questions if that index is meaningful.  The study assumes that Florida's low state-level tax burden is evidence that costs are low and that the state has the ability to raise revenues to meet higher costs. The index does not account for service demands, the political environment concerning taxes, tax bases and tax capacity and the effect of the economy on revenues. TaxWatch also points out that it is very difficult to adequately compare state governments without considering the role local governments have in providing public services.  Florida has the second largest reliance on local governments in the nation, measured by local government's share of total state and local revenue (55.6 percent).  If local governments were included, their higher tax burden, pension problems and higher level of debt would also likely lower Florida's scores.



"The measurement of state fiscal conditions is indeed a difficult task,"   said Kurt Wenner, Vice President for Tax Research at Florida TaxWatch. "While the report has its limitations, it is another useful tool for comparing Florida to other states.