Gov. Rick Scott unveiled a proposed $77 billion budget Wednesday that spends nearly all of a $1 billion surplus on tax cuts and an increase in education spending, but leaves many unmet needs by cutting 1.2 percent of the state workforce.
“It’s a strong budget because our economy is strong,” Scott told a gathering in the Capitol of state reporters and editorial writers. “The way to make it stronger is return more money to the people.”
While Republican governors in states such as Michigan and Nevada are proposing tax increases, Scott proposes cutting taxes and fees by $673 million, the majority from a cut in cellphone and cable television taxes by $470 million, a 3.6 percent cut that would save “an average family” spending $100 a month on those utilities about $43 a year, or $3.58 a month.
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His other cuts include exempting college textbooks from the sales tax, costing $41.4 million; an exemption of 2,189 businesses from the corporate income tax at a cost of $18.4 million; and the elimination of a tax on manufacturing machinery and equipment at a cost of $142.5 million by 2017.
That cut in the so called “communications services tax” has been enthusiastically received by lawmakers, but it takes up a giant portion of the $1 billion surplus, which could pit it against other tax decreases favored by state lawmakers, like a cut in the commercial lease tax.
“We’d love to address the commercial lease tax,” said Senate Appropriations Chair Tom Lee, R-Brandon, last week. “Whether or not we can do the communications services tax and still address the needs of the Senate and House remains to be seen.”
Scott proposes cost savings by cutting 1,353 positions from a total of 114,444 state jobs, a decision sure to disappoint many of his agency heads. For instance, the Department of Corrections, which has been battling an image problem after a spate of prison deaths, requested 654 new positions. But Scott is proposing only more than 300.
A key part of Scott’s proposal: $19.75 billion for K-12 education, up from $18.9 billion in the current budget.
The plan relies on a $452 million increase in revenue from property taxes, and a $391 million increase in funding from the state.
Scott wants to boost per-student spending to $7,176. He touts the figure as a “record high,” but critics point out that it falls short of 2007-08 spending level if inflation is considered.
His proposed education budget includes a $33.5 million increase for early childhood education programs, a $40 million increase for classroom technology and a $14.3 million increase for school safety initiatives.
It prioritizes school choice, setting aside $23.4 million for scholarships for children with special needs and $100 million for charter school construction. But it also includes $60 million in construction funding for traditional public schools, and about $100 million for construction projects in 10 small counties.
The proposal includes $6.5 billion for the state college and university systems. Scott wants to boost performance funding for both. What’s more, he wants a $23.5 million increase to Bright Futures scholarships so the awards can be used to cover the summer term.
Scott did not immediately release the size of his proposed healthcare budget.
Healthcare spending is likely to play a central role in the legislative session that begins March 3. For the past two years, Florida lawmakers have turned down $51 billion in federal funds to expand insurance to 1 million low-income Floridians. Businesses now stand to face fines for failing to provide insurance for employees.
Adding to the strain: Florida stands to lose $1.3 billion in federal funds to help hospitals treat poor and uninsured patients, according to a new report commissioned by the state. That’s because as of June 30, the state will no longer be able to rely on a pot of funding known as the Low Income Pool.
Scott, who has expressed his support for Medicaid expansion in the past, offered his tepid support for the measure on Wednesday, saying he would not “stand in the way.” But he made it clear that Medicaid expansion would not be a priority for him in 2015.
Scott would not say whether his proposed budget accounted for the anticipated loss of LIP funding. “We’re hoping that we can continue to work with the federal government in regard to that,” he said.
House and Senate leaders were mixed about Medicaid expansion. Senate President Andy Gardiner said the Senate was interested in discussing the issue. He pointed to Indiana, which recently won approval from the federal government to use a state-specific Medicaid expansion plan. “We realize that we need a partner in this,” he said.
House Speaker Steve Crisafulli, R-Merritt Island, said the House was not planning to do anything on Medicaid expansion, but he left the door open. “I am a never-say-never kind of guy,” he said.
Scott has also proposed spending $150 million in next year’s budget as part of a 20-year plan to dedicate $5 billion for Everglades restoration. He wants to use a quarter of the money from Amendment 1 — which voters overwhelmingly supported last year for land and water conservation — for the restoration work.
Overall, his budget provides $3 billion to agriculture and natural resources, spending $757 million for land and water programs from documentary stamp revenues.
About Gov. Rick Scott’s proposed budget
Highlights of Gov. Rick Scott's budget proposal
Education: $843 million more for K-12 schools, funded mostly from growth in local property taxes, or $261 more per pupil.
Lower taxes: $673 million in tax cuts, including $470 million in the communications services tax; $41.4 million in sales taxes on college textbooks; $142.5 million in the permanent elimination of the sales tax on manufacturing machinery and equipment; $18.4 million in the corporate income tax; and a $33 million back-to-school sales tax holiday.
Workers: No across-the-board pay increases; elimination of 1,353 positions; additional 163 correctional officers and 775 guardian ad litem positions; a $24.8 million decrease in what the state contributes in health insurance coverage for senior management service and selected exempt service employees.
Debt: Reduction of outstanding state debt of $28 million.
Prisons: $51.2 million increase, including $17.5 million to fill 300 staff vacancies.
Water: $150 million for Everglades restoration, including $20 million for Kissimmee River restoration, plus a quarter of money from Amendment 1 that would provide $670 million for the Everglades over the next four years and more than $5 billion over the next 20 years.
Transportation: $9.9 billion, a $200 million drop from last year's transportation budget. South Florida projects included are $40.4 million to operate and maintain the Port of Miami Tunnel Project; $78.3 million to add lanes and reconstruct State Road 997/Krome Avenue.