Governor Scott's Budget Proposal Picks Wrong Fights for Florida's Future

The Governor has billed his 2017-18 budget recommendation as the “Fighting for Florida’s Future Budget”. However, with its emphasis on more tax reductions and subsidies to profitable businesses, the proposal misses opportunities to make greater strategic investments in areas that will drive widespread economic growth. It also further reduces ongoing revenues that will be needed to carry us through the next economic downturn.

The Governor’s Recommended Budget for the coming fiscal year is a mixed bag. While there are positive aspects, the focus on tax cuts and subsidies for profitable businesses represent a missed opportunity to invest in the things that will grow an economy that works for all Floridians. The total budget of $83.5 billion represents an increase of $1.2 billion from the current year.

This report represents a quick reaction identifying significant points in the Governor’s proposal. FPI will follow with a more detailed examination of the Governor’s budget in coming days.

Tax Cuts

The Governor’s Recommended Budget creates $618 million in tax cuts, as follows:

Cutting taxes for businesses by a total of $469 million by increasing business income tax exemptions from $50,000 to $75,000, and reducing by 25% the tax businesses pay on rent.

Cutting sales taxes by a total of $149 million through multiple sales tax holidays for back-to-school supplies, veterans, hurricane supplies, and camping and fishing supplies.

Economic Development

With regard to economic development, the Governor’s Recommended Budget:

Includes $90 million in subsidies to profitable businesses under the Enterprise Florida Program.

Provides $26 million to maintain the current year funding level at $76 million to promote tourism through Visit Florida in the face of growing controversy over this funding.

Reduces funding for affordable housing from $200 million to $44 million

Health and Human Services

With regard to health care, in the Governor’s Recommended Budget:

Funding is increased by $418 million for Medicaid to reflect increased caseload.

Funding for the Low Income Pool (LIP), reimbursement of hospitals who serve the indigent is maintained at $608 million. However, absent a change in federal policy, $374 million in federal funds for this purpose that the Governor includes in his budget is not expected to be available.

Funding for Children’s Special Health Insurance is increased by $84 million for a total of $480 million.

Funding for hospital inpatient care services is increased by $308 million for a total of $926 million. Of this increase, $113 million is state funding.

Although the state ranks 50th for mental health funding, the recommended budget does not increase funding for these services.

Funding for County Health Departments is increased by $11 million, primarily to recruit and retain additional epidemiologists. This increase is offset by a $13 million reduction in statewide public health support services.

With regard to economic security and self-sufficiency, the Governor’s Recommended Budget

Maintains the current funding level for the Temporary Aid to Needy Families (TANF) Program, which results in payments of $303 per month for a family of four. This assistance supports families who are unemployed, but seeking work, or who cannot work because of illness or disability. The $158 million recommended by the Governor is insufficient to meet the number of Floridians who meet the program’s eligibility requirements.

Public Safety

With regard to public safety, the Governor’s Recommended Budget:

Increases funding for the Department of Corrections by $135 million, including pay increases for existing corrections officers, a higher starting salary to attract new officers and funding for 327 new positions.

Provides $20 million for deferred maintenance and repairs at state prisons.

Increases funding for juvenile detention centers by $12 million, for a total of $123 million, while increasing funding for the $46 million community intervention program by $500,000. Research shows that the community interventions are more cost effective.

Provides $5.8 million to the Department of Law Enforcement to allow for the creation of 46 new positions dedicated to fighting terrorism.

Education

With regard to education, the Governor’s Recommended Budget:

Sets per-student public school funding at $7,421, an increase of $242 over the funding provided by the Legislature for 2016-17. While the funding is described as being the highest level ever, the funding is $115 per student higher than the corresponding appropriation for 2007-08. Adjusted for inflation, per-student funding would have to increase to $8,457 to be comparable to the 2007-08 appropriation.

Creates a series of teacher recruitment and retention programs to replace the controversial Best and Brightest Program. The programs include $10 million for one-time hiring bonuses based on a teacher’s score on subject-area certification examinations, $5 million to increase teacher diversity in critical shortage fields and sites, $6 million to forgive financial aid for high-performing rural students who major in education and teach in their rural school districts for four years, and $6 million to reward high-performing teachers in low-performing schools.

Increases funding for Voluntary Pre-kindergarten (VPK) by $11 million to a total of $406.5 million, including an increase of $50 per school-year student and $43 per summer student.

Prohibits tuition increases in Florida’s public colleges and state universities; provides a sales tax exemption for post-secondary textbooks; and allows the use of Bright Futures Scholarships during summer semester.

Environment

With regard to the environment, the Governor’s Recommended Budget:

Increases funding for Everglades Restoration by $93 million to $225 million.

Increases funding for water restoration assistance by $80 million for a total of $565 million. More than $500 million is dedicated to capital improvement projects including $60 million in new funding for the Indian River Lagoon, St. Lucie and Caloosahatchee estuary restoration.