What Happened To That $1.8 Billion Surplus?

Jul 5, 2015 by

Now that some time has passed since the Florida Legislature produced a budget and the governor cut $461 million from it, we’re starting to see the results.

Tax cuts will be bragged about; 840,000 Floridians, many the working poor, are still uninsured, and the voters’ will on Amendment One, the water and land conservation measure, was completely ignored.

In a state of almost 20 million residents, 100 million tourists and a $78 billion annual budget, how we collect and spend our revenues is important.

We are a low-tax state with no state income tax. A good portion of our revenues come from the sales tax, which means tourists contribute quite a bit to our funding of government services.

When the real estate market is buzzing, documentary stamp revenues increase, creating a perfect nexus for funding both environmental projects and infrastructure with dollars generated from increased development.

And as the housing industry rebounds, so too do home values, producing more property tax revenues for local governments without elected officials raising tax rates. Don’t get me wrong, property owners are paying more but their properties will be worth more.

Unfortunately, cities and counties don’t get all of the additional revenue to meet the backlog of infrastructure needs and government services for a growing population.

Why not?

For one example, remember that big bump in education funding that Gov. Rick Scott and the Legislature boasted about? A portion of that was funded by the increase in property tax revenue through a budget calculation known as “required local effort.”

Local property taxes account for a large percentage of education funding. An Education Law Center report suggested Florida’s school districts get 32 percent of their K-12 funding from state sources, well below the national average of 44 percent.

Despite funding well under half of the education budget, the state attaches many strings and removes a lot of discretion from the counties and local school boards — but I digress.

So if you thought the Legislature was being benevolent on education funding using revenue solely generated by the state, you would be mistaken.

Let’s skip over the fact that the Legislature has only one bill it must pass — the budget — and failed to do so in its 60-day session and had to meet in overtime for another try. Let’s get right to what it had to work with.

The revenue estimators believed that there would be an additional $1.8 billion over last year’s revenues, which many refer to as a surplus. That gave the Legislature the ability to increase spending, put some money in savings or return some to taxpayers.

Additionally, the Legislature had the opportunity to access $2.2 billion in federal revenue to expand its Medicaid program and to do it in a way that was unique to Florida’s needs. It was estimated that there were over 800,000 residents that could have been covered with no state revenues needed. The Senate wanted to, the House and governor refused.

This would have freed up more money from state and local coffers since less would be needed to fund the Low Income Pool (LIP) to cover charity care. Instead, the state had to fill the hole in funding with hundreds of millions of dollars, local governments had to chip in more and hospitals saw a cut in their future reimbursements.

To add insult to injury, Gov. Scott vetoed $9.5 million for free clinics, causing layoffs and perhaps some clinic closures.

And while documentary stamp revenue continued to grow, the Legislature refused to follow the will of the voters and spend one-third of it — $740 million –on land and water preservation, conservation and management as Amendment 1 required.

Did I mention that Amendment 1 passed with 75 percent of the vote, surpassing every other statewide issue or candidate on the ballot?

Instead, the Legislature moved money around and used the “new funds” to replace existing funding to pay for salaries, their pet projects and anything else they thought might loosely fit the amendment language.

The Legislature knew what the voters expected with the amendment’s passage but spitefully ignored them. Now proponents are suing on behalf of the voters and the Legislature will use tax dollars to defend its actions.

Meanwhile, the positive effects, both economic and environmental, will remain unrealized.

And while the state started off with a generous surplus, tolls are being increased on our highways, court clerks are cutting personnel and services due to budget cuts, state employees continue to work without raises and our tourist welcome centers will cease to provide Florida-grown juice to our visitors.

It’s odd that one of our top industries — tourism — is ceasing to showcase a product from another — agriculture. And a third cog in our economic engine –construction and development — is generating additional tax revenue that is not being invested in our infrastructure or in our environment and quality of life — as the Constitution now requires.

Will voters remember in 2016?



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