TALLAHASSEE – An executive for oil giant BP on Tuesday pledged another $25 million to help the state’s battered tourism industry weather the oil-spill disaster that has sent vacationers fleeing for other seaside locales and threatens to balloon the state’s $6 billion budget shortfall.
The state might even delay or forgive back taxes owed by coastal businesses.
BP Senior Vice President Bob Fryar told Gov. Charlie Crist and the Florida Cabinet that the company was cutting another $25 million check to the state to help offset the economic losses from the spill. The company has already provided $50 million, and Crist had asked for another $150 million — a figure likely to grow exponentially.
But that news wasn’t enough for Crist and the Cabinet, who blasted the company for moving too slowly to help beachfront businesses stay afloat as their clientele vanishes.
Economists won’t have a solid feel for the financial losses likely to incur for months, but it is certain to shave billions of dollars off the state’s gross domestic product and could cost Florida hundreds of millions of dollars in lost taxes.
One University of Central Florida economic study released Tuesday found that if even 10 percent of the leisure and tourism spending is lost in 23 coastal counties from the Panhandle to the Keys, the state stands to lose 39,000 jobs and $2.2 billion in economic activity.
“This is going to start with tourism but spread throughout the state economy,” said Sean Snaith, director of UCF Institute of Economic Competitiveness.
Florida is already expecting a $6 billion shortfall in 2011, thanks to the flame-out of federal stimulus funding that has propped up Florida government.
Chief Financial Officer Alex Sink, who had requested the meeting with BP CEO Tony Hayward, told Fryar that “your definition of speed and mine are two different things.”
She complained that business owners in the Panhandle were being given $5,000 checks as temporary assistance and calling it “shut-up money.”
“It’s no fun watching grown men cry,” Sink said. “These people need cash in their checking accounts right now so they don’t have to fire their employees.”
Fryar said the company had already paid 18,500 of the 38,000 claims filed by workers thus far, for about $50 million in lost income, and would have a plan to help larger companies struggling by the end of the week.
Crist suggested the company could do much better in speeding claims checks to businesses that are hemorrhaging tourism dollars as vacationers go elsewhere this summer, since the company was poised to announce $10 billion-plus in dividends for shareholders.
“You’re a company with enormous resources. … Some of these people don’t have resources,” Crist said. “The speed with which you can relieve some of the suffering is of utmost importance. … We demand it.”
At the same time, Florida Department of Revenue Executive Director Lisa Echeverri told the Cabinet the agency was looking at ways to give tax help to businesses struggling with the crisis, including waiving late penalties or providing tax amnesty for those who don’t remit their sales tax collections and unemployment compensation taxes to the state.
Echeverri said her agency was hearing that many businesses had to redirect tax payments to keep workers on their payrolls – a drop-off in tax collections likely to materialize later this month.
“This has really caught a lot of businesses off guard,” Echeverri said.
Property tax appraisers from the Panhandle are also concerned that property values will likely fall because of the oil spill but tax bills won’t under current law, and Echeverri said it may take legislative action to adjust the tax levies. Sink suggested lawmakers should do it in a summer special session.
Florida’s political leadership has been under mounting pressure to appear proactive in dealing with what is widely being called the worst environmental disaster in national history.
A separate advisory group Crist formed to review Florida’s legal options – and headed by two former state attorneys general, Bob Butterworth and Jim Smith – is holding its first meeting in Tallahassee Wednesday and is widely expected to make recommendations on whether to file a lawsuit.
Even before Fryar started talking, Attorney General Bill McCollum announced he was “ticked off” — but mostly with the federal government response for not bringing in enough ships to scoop up oil and other resources to combat the spill.
When Sink chimed in that BP should share in the blame, McCollum said, “I’m ticked at both of them. They’re both responsible here. It’s not one or the other, it’s both of them.”