Florida’s Budget is Approaching the Final Stages

The joint conference committees concluded their negotiations last evening. They each finalized those issues that they could come to agreement on and now all outstanding issues have been bumped to the Conference Committee Chairs, Chairmen Tom Lee and Richard Corcoran.

Education

The Education Conference Committee held its final meeting Sunday evening. Chairman Gaetz and Chairman Fresen agreed to funding levels and source for the Florida Education Finance Program, (FEFP).  The agreement would increase the state’s share of the $20 billion program to $11.3 billion. That’s $385 million more than the current year. It would also give $428 million in “tax relief” on local property taxes.  They were not, however, able to come to agreement on the remaining funding and policy line-items.

Transportation and Economic Development

The Transportation and Economic Development Conference Committee held its last meeting Monday night, leaving differences between the House and the Senate on funding for several local projects and public-private partnerships. Chairman Latvala and Chairman Ingram were unable to agree on funding for both Space Florida and Visit Florida, as well as the source of nearly $200 million in dollars marked for affordable housing programs.

Health and Human Services

The Health and Human Services Conference Committee also had its final meeting Monday night. Chairman Garcia and Chairman Hudson agreed on almost all of the health care budget language, including the Medicaid conforming bill, except for some language including a specific certificate of need exemption and graduate medical education funding. The Senate made an offer on the implementing bill, proviso as well as the $600 million Low Income Pool (LIP) and the $237 million Disproportionate Share Hospital Program (DSH) to help hospitals treat the poor and uninsured. The House agreed to everything except for a few items in proviso including language on Planned Parenthood. All of the remaining unresolved items have been bumped to Chairs Lee and Corcoran to sort out.


Governor’s Priorities Left on the Cutting Room Floor

The 2016 Legislative Session is turning out to be a rough one on Governor Rick Scott. A few weeks before session began the Governor offered his budget priorities to the Legislature, which included a $1 billion tax cut package, a $250 million fund for Enterprise Florida, and record levels of education spending. As the session is entering its final weeks and the budget is beginning to take shape, it appears that the Governor will not be getting many of his top priorities.
Tax Cut Package
Governor Scott’s most dramatic proposal was the $1 billion in tax cuts. The cuts included permanently eliminating the income tax on manufacturing and retail businesses, eliminating the tax on manufacturing machinery and equipment, cutting the tax on commercial leases by one percent, extending the sales tax exemption on college textbooks, and including funding for a 10-day back-to-school sales tax holiday and a 9-day disaster preparedness sales tax holiday. Early on in the budget process the House had a tax cut package the delivered the $1 billion in tax cuts over two years, but the Senate did not include the package in their proposal. As part of the negotiations between Appropriations Chairs Tom Lee and Richard Corcoran, the Legislature will be cutting $400 million in taxes, well short of the $1 billion tax cut proposed by Governor Scott. Senator Lee has stated that $200 million of the cuts will come from recurring revenue streams and $200 million will be from non-recurring revenue.
Florida Enterprise Fund

Governor Scott also requested $250 million for a fund for Enterprise Florida Inc. Enterprise Florida is a public-private partnership between Florida’s business and government leaders and is the principal economic development organization for Florida. EFI provides incentives for large and small businesses to either relocate to, or stay in Florida. When allocations were released of Friday, it was shown that the Legislature will not be giving any money to EFI. Leadership in the Legislature criticized the plan, calling it cooperate welfare.

Education Funding

The last of the Governor’s proposals requested record levels of education spending using a modified school funding formula. While the idea of increasing education funding was well received, many members of the Legislature criticized the funding formula for increasing the burden on local property taxes to boost the funding. During the conferencing process the education committee agreed to increase spending by over $385 million more than the current year. They are also reducing the funding burden on property taxes from over $9 billion to $8.8 billion.

Many have concern and have been surprised with the Legislature’s approach regarding Governor Scott’s budget requests, especially considering that Governor Scott has already demonstrated his willingness to use his  line item veto authority last year when he cut almost half a billion dollars’ worth of funding and special projects. With Governor Scott receiving so little of what he requested, there are serious concerns that he will aggressively use his veto powers again in a similar fashion this year.