Gov. Rick Scott proposes largest budget in Florida history at $74.2 billion

Gov. Rick Scott, who ran as a cost-cutting critic of “bloated” government, opened the state’s checkbook Thursday and urged the Legislature to pass a $74.2 billion budget, an increase of $4 billion.

Citing a surge in tax revenue from a reviving economy, Scott wants to give teachers $2,500 raises, award cash bonuses to state workers, give a sales tax break to manufacturers who buy equipment and make another small cut in the corporate income tax.

It’s the first time in five years that the state won’t have to make deep cuts, but legislative leaders are urging a go-slow approach to increased spending.

To balance his budget, Scott also would cut Medicaid services and payments to hospitals, squeeze $9 million in savings from county health clinics, spend no more money for mental health or substance abuse prevention, eliminate 3,600 more state jobs and freeze state workers’ salaries for the seventh straight year.

“We balanced the budget, paid down state debt, cut taxes, cut regulation and it worked,” Scott said. “Now we have the wherewithal to make more investments.”

Scott rolled out his “Florida Families First” budget at a news conference, surrounded by state university leaders, superintendents and teachers.

The scene was a vivid contrast from the same event of two years ago, when Scott told cheering tea party activists at a church in Eustis that he wanted to cut spending by $5 billion and make state workers contribute 5 percent of their pay to their pensions.

The centerpiece of his budget is a $1.2 billion hike in public school spending, including $480 million for the teacher pay hike and $300 million to reduce the unfunded liability in teachers’ pensions.

Scott’s job approval ratings remain stubbornly low among a majority of voters. But a “listening tour” to schools last fall has made him a cheerleader for education, and people say he listens more.

“It’s an excellent budget,” said Wayne Blanton of the Florida School Boards Association. “He listened to us and the business community.”

Mental health advocate John Bryant of the Florida Council for Community Mental Health said Scott’s unwillingness to spend more money for treatment was disappointing.

“Our concern is that this funding is flat after Sandy Hook,” said Bryant, referring to the mass killings at a Connecticut school in December. “We expected to see an increase.”

Other than schools, Scott’s new tax break for manufacturing equipment is his other top priority. The proposal allows manufacturers to buy new equipment tax-free, removing a hurdle that they show an increase in production.

Scott said it would save manufacturers $140 million a year in taxes paid by a wide range of industries such as defense and construction, who provide 4 percent of Florida jobs.

Nancy Stephens, executive director of the Florida Manufacturers Association, said the tax break will improve Florida’s competitive position with other southeastern states.

“Manufacturers are now at a disadvantage because while new and expanding companies don’t pay a sales tax, companies that have been here for years do,’’ she said. “We’re very excited about this.”

In higher education, Scott called for holding the line on state college and university tuition, while restoring some of a controversial $300 million cut to universities made last year.

Another $167 million is tied to performance, including the percentage of students who get jobs after graduation, how much they earn and the cost of educating them.

Scott did make good on a promise to help the University of Florida increase its national ranking by giving the school $15 million to hire more faculty, an action that helped to entice UF President Bernie Machen to postpone his retirement.

Machen said Scott is not the same governor who came into office two years ago.

“He’s delivered on everything he told me he would do,” Machen said. “Maybe you have seen someone who’s just figuring out how important higher-ed is to building the economy of the state.”

State University System Chancellor Frank Brogan said he was relieved to see university funding restored in Scott’s budget, even if it comes with strings attached.

“It’s an old axiom: It’s better that it’s in the governor’s budget then not to be in the governor’s budget,” Brogan said.

On public safety, Scott wants to privatize the rest of Florida’s minimum-security inmate work release centers (14 in all), and spend $7.6 million to require every inmate on work release to wear an electronic monitor. Scott aides said that was partly the result of problems at a privately run center in Largo where two inmates have been charged with murder and rape.

On the environment, Scott wants to steer more money into programs than in his two previous budgets by earmarking $75 million for the Florida Forever land-buying program and another $60 million for the state’s share of Everglades restoration.

“It’s starting to put environmental spending back on track where it used to be,’’ said Eric Draper of Audubon of Florida. “Gov. Scott is starting to make the environment a priority. This does seem like a different Gov. Scott. We’re seeing his office listening more.”

To pay for Florida Forever land buys, Scott proposes using $50 million from state land sales.

Scott’s budget would cut the state workforce by 3,647 more jobs, or 3.1 percent. Two-thirds of those jobs are currently filled, but Scott aides said the rate of turnover in government means many affected workers can get new jobs.

What is not in Scott’s budget is any money for the expansion of Medicaid under the federal Affordable Care Act. Scott said too many unanswered questions about the program’s cost and a lack of faith in Congress’ fiscal policy make it a bad risk.

“Today is not the day for that decision,” Scott said. “We still have many questions unanswered.”

Democrats, who have long called for higher teacher salaries, nonetheless criticized Scott’s priorities, especially his opposition to paying for the Medicaid expansion.

Senate Democratic Leader Chris Smith, D-Fort Lauderdale, called Scott’s budget a “taxpayer financed down payment on courting votes for 2014.”

Scott is urging that all state employees pay the same for health insurance: $50 per month for individuals and $180 for families. That means Scott, the three elected Cabinet members, legislators and highly paid state employees would see their insurance premiums rise. Scott pays less than $400 a year to cover himself and his wife, Ann.

Scott’s proposals will begin to be scrutinized next week by state legislators, who write the budget that takes effect July 1.

Read more about the governor’s budget proposal at floridafamiliesfirst.com.

Herald/Times staff writers Mary Ellen Klas, Tia Mitchell and Michael Van Sickler contributed to this report.