Gov. Rick Scott called on the state Legislature on Wednesday to boost primary education funding by $1 billion next year as he looks to make the rest of the 2012-13 budget4.6 percent more efficient.
Florida House Speaker Dean Cannon, R-Winter Park, called the budget thoughtful, while Senate President Mike Haridopolos, R-Merritt Island, said the budget might need to be delayed until after the regular session.
Speaking before a packed state Cabinet conference room, Scott outlined his $66.4 billion education and jobs budget for the next fiscal year that would be $4.6 billion lower than the current fiscal year that ends June 30, 2012.
Scott, in proposing his second fiscal budget since taking office in January, said he wont sign any budget without a significant increase for education.
I will not sign any budget that doesnt significantly increase state funding for education, Scott said.
Scott said the desire to increase per-student funding from $6,230 in the current year to $6,372 next year was based on comments he received from educators and business leaders throughout the state.
Education Commissioner Gerald Robinson quickly thanked Scott for his recommendation.
This budget will help students gain the tools to master increased standards and graduate from high school college- and career-ready, Robinson stated in a release. I also want to thank the state Board of Education for its continued support of increasing our legislative budget to sustain our public education system. The departments strategic plan aligns with the governors mission and the proposed budget will help preserve what our schools have accomplished in the past and stand to achieve in the future.
The tradeoff for the increase in primary education dollars comes through across-the-board reductions through the state, ranging from a reduction in Medicaid reimbursement payments based on recipients' financial status, to the closing and privatization of correction facilities, to laying off an additional 2,800 state employees, and further cuts to regulations for small business.
View Scotts budget recommendations here.
If we want more jobs in Florida, we have to make sure Florida companies do well, Scott said.
I absolutely believe in the free market. I absolutely believe that if we can allow the free market to work, it has to be a fair market. If we do that, costs go down, quality goes up, service goes up.
Another 1,700 currently vacant positions would be written off the books.
Since Scott took office, Florida has eliminated 1,129 state government positions.
The budget also calls for $35 million in tax relief measures next year, with an additional $86 million in tax cuts the following year, a decrease to Medicaid from a record high of $21 billion this year to $19.5 billion.
Meanwhile, Scott, who has focused on university education reform in the past couple of months, said his recommendation is for tuition to remain even from the current year.
Scott said his recommendations are based on what hes heard from Floridians, and he welcomes continued advice.
I believe this budget reflects what I heard and that together we will ensure that Florida remains the best place to live, work and play, he said.
Cannon noted that he had yet to review the details of the governors budget, but called the recommendations thoughtful.
It is important that we send the right signals to the business community by working hard to create an environment that demonstrates stability and inspires confidence in business owners who create the jobs Floridians so desperately need, Cannon stated in a release.
By again recommending a balanced budget that does not raise taxes, Governor Scott has reaffirmed his commitment to existing Florida businesses and taken another important step to attract out-of-state businesses considering locating or expanding in Florida.
While Cannon expressed confidence that the budget could be approved by the end of the regular session in February, Haridopolos said a special session might be needed.
I am very reluctant to pass a budget with numbers uncertain, Haridopolos said.We are giving great consideration to maybe delaying the budgeting process until we have very certain numbers.
Haridopolos noted that state economists with the Revenue Estimating Conference are able to provide better revenue forecasts closer to the start of the fiscal year.
Given the topsy-turvy economy, Haridopolos said, given the fact that we were looking pretty good in the summer and (revenue estimates) dipped very dramatically in late summer and August, weve seen a reversal in consumer confidence in the last month or so, were not sure where the number will be with the Revenue Estimating Conference.
House Democratic Leader Ron Saunders, D-Key West, was pleased that Scott focused on education, but expressed concern about what the governors recommendations could mean for social service and health care programs.
"Florida's working families, middle-class taxpayers and small businesses deserve priority attention in Florida's next state budget, Saunders stated in a release. House Democrats look forward to working with the governor and our Republican colleagues to improve spending for public education, job creation and investment in infrastructure."
The budget calls for cuts of $1.8 billion in the Agency for Health Care Administration, $1.2 billion in the Department of Transportation and $103 million in reductions to Corrections.
Corrections would also face a reduction of 2,064 positions, while juvenile justice, proposed for 5 million fewer dollars than in the current year, would decrease by 628 positions.
Florida Department of Corrections Secretary Ken Tucker supported Scotts proposal to streamline the prison system and reduce costs by $100 million a year.
These savings are achieved by reducing excess capacity in Floridas prisons generated through effective re-entry programs that are resulting in reduced recidivism, Tucker stated in a release. Additional savings come through public/private partnerships, including privatizing inmate health service, which will save nearly $23 million annually.
Scott, in his budget release, projects prison population dropping from 101,022 currently incarcerated to 100,015 by 2013.
Only Military Affairs, growing by 20, and Management Services, proposed to grow by 3.5 full-time employees, would gain workers under Scotts plan.
The following is the governor's office news release describing the budget proposal:
Small-Business Tax Reform
A number of small-business tax reform measures give Florida businesses the competitive advantage needed to create jobs, including:
- Increasing the business tax exemption again this year from $25,000 to $50,000, eliminating tax liability for more than 25 percent of those who pay it and reducing taxes by about $25 million for all taxpayers.
- A tangible personal property (TPP) tax exemption for those with less than $50,000 of TPP, providing an overall tax relief of about $22 million, if approved by the voters.
- Broadening the sales tax exemption for manufacturing by lowering the percentage expanding businesses must increase output, from 10 to 5 percent, because Gov. Scott is committed to making sure manufacturing can grow.
Pension Reform
This budget places approximately $300 million into the Florida Retirement System pension fund: $180 million of new state funds to fully fund the normal cost, plus an additional $120 million toward the unfunded actuarial liability.
We must be serious about fixing Floridas pension fund in order to protect our ability to fund important priorities like education and jobs, Scott said. The pension as it is now is a major liability for the state that will threaten other priorities if we do not talk honestly about its status with state employees.
Controlling Rising Medicaid Costs
Scott's budget finds significant savings from improving efficiencies in the way Medicaid hospital providers are reimbursed for inpatient and outpatient services and other efficiencies for hospital stays and emergency room visits. To create a more fair reimbursement methodology, the governors budget proposes paying similar rates for the same procedures in similar hospitals by creating a flat rate for hospital groups using averaged cost data.
No program has grown as fast and as much as Medicaid, and we must find a way to control the cost. If we do nothing, this program will bankrupt our state, Scott stated.
Criminal Justice Reform
Because of the state's strong commitment to criminal justice reforms, the states prison population is shrinking, and Florida is experiencing a 40-year low crime rate. Floridians deserve to see some efficiencies as a result. Florida has the opportunity now to find efficiencies in the prison system so that more of the dollars going to prisons can be spent on education and igniting job growth.
Heading in the Right Direction
Florida is heading in the right direction. Florida has gained 106,900 net new jobs since January with a total of 118,000 jobs in the private sector. In addition, Floridas unemployment rate is at its lowest point in 28 months at 10.3 percent. Under input Scott received from educators, families and business owners, Florida is doing the right things to keep the cost of living low, get the state back to work, and create a world-class education system that prepares students for a job.
I would like to thank all of the Floridians -- small-business owners, job creators, parents, teachers and students -- that took the time to talk with me over the past few months. It has been an important and meaningful dialogue and I hope they will continue to let me know what they think, Scott said.
Reach Jim Turner at jturner@sunshinestatenews.com or (772) 215-9889.
