Scott Unveils Budget Filled With Deep Cuts and Major Change

By: John Kennedy, The News Service of Florida
By: John Kennedy, The News Service of Florida

THE CAPITAL, TALLAHASSEE, Feb. 7, 2011 --

Gov. Rick Scott unveiled his first budget Monday as Florida’s chief executive – a $65.9 billion blueprint that cuts $4.6 billion in state spending, trims 8,681 jobs across state agencies, and sets the state on course for even more reductions next year.

Scott went to the Lake County city of Eustis to tout the proposal at a rally with 1,000 Tea Party activists who steadily cheered his belt-tightening message, and appeared ready to be marshaled as a grassroots army to help the governor get his plan through a so-far lukewarm Legislature.

Scott said his proposal also leaves room for $2 billion in tax cuts – part of his central campaign theme. The new governor – who ran and won last November on an outsider’s theme – departed with tradition both by laying out his budget 200 miles from the state Capitol, but also by outlining a two-year spending plan.

His budget proposal for 2012-13 shrinks state spending even more – to $63.3 billion. Spread throughout the proposal are performance goals with outcomes expected to be achieved by specific line-item spending.

“Let’s start with the obvious,” Scott said to cheers from Tea Party leaders gathered at the First Baptist Church in Eustis. “We can’t spend more than we take in.”

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Gov. Rick Scott speaks Monday about his proposed budget and takes a few questions from reporters. Scott sent his $65.8 billion budget proposal to lawmakers on Monday outlining about $5 billion in cuts, and held a rally earlier in the day in Eustis. Later in the day he returned to Tallahassee and spoke with reporters about the plan.

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With the state facing a budget shortfall of at least $3.6 billion, Scott is proposing deep reductions in many agencies, with some of the heaviest scalpeling used on those whose workers and allies formed a political base for gubernatorial rival Alex Sink.

The Corrections Department would absorb an $82.4 million cut and lose 1,690 jobs – or more than 5 percent of its workforce. The Police Benevolent Association union which represents most correctional officers, campaigned heavily against Scott last fall, warning he would cut so many prison jobs it would put people in danger.

The state’s Education Department budget is reduced $3.3 billion, the largest single reduction in Scott’s proposal. While education also is the largest item of state spending overall, the Florida Education Association, the state’s largest teachers’ union, also was a vocal opponent of Scott, campaigning for the Democratic nominee.

Returning to the Capitol following the Tea Party event, Scott said he wasn’t proposing to cut state financing to public schools, that the budget merely reflected the loss of federal dollars.

While per student spending is slated to be $6,600, a $298 reduction from this year’s level after retirement savings are factored in, Scott attributed that drop to the loss of $872 million in federal stimulus money that went to K-12 education, money Scott said the state shouldn’t have relied on in the first place.

Scott did propose to earmark $8.6 billion for “The Education Choice Fund,” aimed at expanding charter school, virtual-school and other “choice” options for elementary and high school students.

Scott has included in his budget a plan to make the 655,000 public employees – mostly school board members – contribute 5 percent of their paychecks for remaining in the Florida Retirement System, the government pension plan. Scott has said those contributions will save taxpayers $2.8 billion over the next two years.

Some of Scott’s centerpiece campaign promises – cutting property-taxes and the state’s corporate-income tax levy – came up smaller than earlier billed.

Combined, the first-year reductions were just below $1 billion for these two tax cuts – about half of his campaign pledge.

Scott did, however, manage to actually exceed the $2 billion in promised tax reductions by adding $301.4 million in unemployment compensation tax cuts, $177.8 million in water management district property-tax reductions, achieved by 25 percent rollbacks the next two years, and a $235.7 million reduction in highway safety fees approved by lawmakers in 2009.
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Scott’s budget proposal also includes other cost-cutting measures that, if history is a guide, are certain to prove controversial with state lawmakers. Among them:

-Privatizing the state’s three mental health hospitals in Chattahoochee, Macclenny and Gainesville, savings also gained by eliminating the state workforce;

-Closing two prisons – a move Scott said was made easier by the state having 8,000 excess prison beds in the system;

-Saving close to $1 billion by limiting the state’s Medically Needy program to pregnant women and children, barring thousands of transplant patients and those with catastrophic illnesses from participating in the program;

-Cutting $1 billion from the state’s Agency for Health Care Administration, by imposing 5 percent cuts in state payments to hospitals, nursing homes and other health-care facilities, and eliminating annual cost of health care increases;

-Setting in motion plans to steer Florida’s more than 2.7 million Medicaid patients into managed care programs, setting the stage for $1.2 billion in savings in 2012-13;
-Revamping health insurance coverage for state workers, increasing payments for Florida’s select exempt employees such as legislative staff and lawmakers, and senior managers. Scott also would cap employee health coverage at $5,000 annually;

-More than double the size of spending on Scott’s own office – bringing its budget to more than $638,000, as the governor takes on a greater role as a business recruiter for Florida. A newly created economic development agency would come under Scott’s control, while he also wants sole authority over tax- and financial incentives that currently must be approved by the Legislative Budget Commission.

Although Scott’s budget proposal sets the stage for flashpoints with lawmakers, for now, legislative leaders were spare in their praise. Indeed, reaction around the state was generally muted, in part, because Scott’s budget plan was largely available only on a website that was down most of the day, apparently because of overuse.

“The first and highest priorities of the Florida House are to cut government spending and not raise taxes,” said House Speaker Dean Cannon, R-Winter Park. “I am grateful that Gov. Scott shares these goals.”

Senate President Mike Haridopolos, R-Merritt Island, said, “The Senate is dedicated to working with the governor to provide a balanced budget with no new taxes. The best way to improve the business environment in Florida is to keep taxes low and live within our means. We will do that.”

Senate Democratic Leader Nan Rich of Weston, however, derided the tax-cuts and spending reductions coursing through Scott’s proposal. She said the Republican governor’s approach could threaten the state’s economic turnaround.

“The retreaded voodoo economics we heard today will not right this ship,” Rich said. “But it will drill more holes in our already badly damaged public education. It will further eliminate the life rafts hundreds of thousands of Floridians have had to turn to for basic survival.”


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