Surplus means more spending on education, but showdown on teacher pay looms
An improved economy and six years of relentless budget cuts have produced something that had been as rare as unicorns: a surplus.
The House and Senate on Monday released their allocations for general revenue spending next year, providing the first glimpse of how they’ll carve up a third of the state’s $74 billion budget in the coming weeks. (General revenue is derived from the sales tax, the corporate income tax, documentary stamps and various other taxes and fees; federal grants make up another third of the budget, while state trust funds make up the remainder).
The House’s proposed $26.9 billion in allocations was more detailed, including a target of spending $1 billion more in k-12 education, $300 million to restore the cuts from higher education last year, and the first across the board pay raise in over six years for “hard working” state employees. (Does the modifier mean it will be merit-based?)
That increase in allocations on education will provide one of the big dramas for the 2013 legislative session: whether lawmakers will agree to pay for Gov. Rick Scott’s across-the-board teacher raises of $2,500.
The raises are expected to cost about $480 million, which was part of the $14.3 billion education budget Scott proposed in January. In the House allocations, Florida House Speaker Will Weatherford and leaders set aside $14 billion in general revenue dollars for education. Of that, $10.6 billion is for lower education and $3.4 billion is for higher education. That’s a $300 million difference between Scott’s budget and the House allocation. Senate President Don Gaetz and his appropriation chair Joe Negron came down between the two, though closer to the House total, by setting aside $14.2 billion for education, or 1.2 percent more than the House.
While it might seem the House is low-balling education, its allocation is actually $1.6 billion more than its allocation at this same point last year, representing a 13 percent increase from what it proposed spending last year.
The other major budget category that general revenue is spent on is health care. Scott proposed $7.85 billion for health and human services, or about $20 million more than the House proposed allocation for health care and about $100 million more than the Senate.
In Criminal and Civil Justice the numbers are nearly identical. Scott’s proposal of $3.58 billion is just $7 million more than the Senate and $48 million more than the House.
All three budgets reflect a conservative approach to budgeting. The House budget fell $1.6 billion short of the $28.5 billion in general revenue that’s projected to be available next year. The Senate fell $1.7 billion short. Such reserves are necessary, House and Senate leaders say, because there’s more fiscal uncertainty with Obamacare and the federal cuts known as the sequester that went into place on March 1.
"To account for unpredictability at the federal level comprised of the unknown impacts associated with sequestration and potential impact to state revenues caused by the federal government's implementation of (the Affordable Care Act), the Senate's budget allocations reflect Florida's need to maintain adequate reserves,” said Negron in a statement.
Weatherford wants at least $1.2 billion in reserves, including at least $500 million for Florida’s pension system.
The allocations are an important first-step of the budget process, and they happen mostly behind closed doors among presiding officers. Now set, allocations can’t be mixed and matched. For instance, lawmakers can’t take money out of Criminal Justice and propose spending for Education, and vice versa.
Appropriation committee meetings this week and next will provide the initial public discussions among lawmakers about how to divvy up the allocations. But the mood will be strikingly different than in the previous six years when lawmakers have had no major surplus to spend, and could only cut.
“For the first time in seven years, we are no longer facing a significant budget shortfall,” Weatherford said in a statement to House members. “The allocations were developed in such a manner that does not necessitate funding reductions.”