TALLAHASSEE — Gov. Rick Scott on Wednesday put forth a state budget for next year that boosts public school spending by $1 billion, partly by sharply cutting what Florida pays hospitals to treat patients in the highly expensive Medicaid program.
"I will not sign a budget that does not significantly increase state funding for education," Scott said at a news conference in the Capitol, a clear veto threat directed at his fellow Republicans in the Legislature. "We've got to really focus on education."
In a $66.4 billion budget that he says makes "tough choices," Scott proposes to cut 4,500 state jobs, raise monthly medical premiums for highly paid state employees and legislators, increase bonus money to high performing schools, continue privatization of the prison system — despite legal obstacles — and close up to six state prisons and work camps because of a shrinking inmate population.
All of Scott's recommendations require legislative approval. They are a starting point in negotiations with lawmakers and interest groups in an election year in which the state faces a projected budget shortfall of $1.7 billion.
Scott's emphasis on education is a major shift from his first budget of a year ago in which he called for a 10 percent cut in school spending. The Legislature passed a budget that cut education spending by 8 percent, or $1.35 billion — the equivalent of $542 per student.
Marking a clear shift in priorities, the governor who ran on a platform of creating jobs now says he's about "education and jobs."
The rebooting of Scott's agenda follows a series of town hall meetings around the state in which people resoundingly said they want to see more money spent on schools.
Hillsborough County school superintendent MaryEllen Elia called Scott's education proposal "very promising" and added: "The governor is making a strong statement that he is going to make K-12 education his priority."
About $190 million of the $1 billion is needed to pay for an anticipated influx of more than 30,000 new students next year, and $220 million would compensate for a 3 percent drop in property values.
To find more money for schools, Scott is asking the Legislature to impose rigid new caps on how much the state pays to treat patients covered by the Medicaid program. Runaway Medicaid costs have skyrocketed every year for more than a decade, and the program is riddled with fraud, particularly in South Florida.
A Medicaid overhaul approved by the Legislature last spring that's designed to control costs by moving patients into managed care has not been approved by President Barack Obama's administration.
"No program in this state has grown this fast or costs this much," said Scott, pointing to a chart showing next year's projected Medicaid costs at $21.6 billion. "If we do nothing, this line will bankrupt our state. We're going to step up and do something to stop these increases."
Scott, who became wealthy by running Columbia/HCA, the nation's largest for-profit network of hospitals, said the current system of reimbursing hospitals for care is "unfair, illogical and incredibly expensive for Florida families and businesses." He wants limits on the length of in-patient stays to further cut costs.
In Hillsborough County, Scott said, four hospitals with similar types of patients charge from $450 to $2,075 a day. He says the state should impose a flat rate for care in each of 10 types of hospitals, based on average cost data.
Scott said a highly skilled work force is needed to grow jobs in Florida and compete in the world economy, but he proposes no additional money for the higher education system, which has weathered a series of cuts in recent years.
House Majority Leader Carlos Lopez-Cantera, R-Miami, said Scott's budget would "strike a healthy balance between protecting Florida's taxpayers and ensuring Florida's priorities are funded."
Democrats sarcastically welcomed Scott's "newfound fervor" for education but chastised him for not supporting a repeal of tax breaks on businesses, which the minority party says are not paying their fair share.
"Pitting one critical priority against another is not the solution Floridians expect from the leader of the fourth largest state in the nation," said Senate Democratic leader Nan Rich of Weston.
Other cost savings in Scott's budget would come from closing up to six prisons and work camps, based on various factors such as operating costs and proximity to other prisons. The Department of Corrections would lose 2,000 positions — far more than any other state agency in Scott's budget.
That could pose political obstacles for Scott in a reapportionment year when all 160 legislators face voters next fall. State prisons are a major source of jobs in many small towns in Central and North Florida. But with violent crime in Florida at a 40-year low, Corrections Secretary Ken Tucker said the state has about 10,000 empty prison beds. Inmates and staff members will be gradually transferred from the chosen prisons until they are empty, "so it should have minimal impact on jobs," Tucker said.
The governor's office is also counting cost savings from privatizing all prison health care statewide and all prisons in an 18-county region of South Florida. But private firms are protesting the outsourcing of health care plan, which requires 7 percent cost savings each year, and the prison privatization plan is on hold because of a court decision.
About 27,000 highly paid state employees, including legislators, would pay over $1,000 a year more for health insurance in Scott's budget than they do now. Scott's budget would hike individual premiums from $8.34 to $30 a month and family coverage from $30 to $180 per month.
Scott's budget proposes the most modest tax relief package in more than a decade, about $34 million. He wants lawmakers to double the business tax exemption from $25,000 to $50,000, and would ask Florida voters to approve a ballot initiative giving an exemption to businesses with less than $50,000 in tangible personal property.
Senate budget committees plan to begin analyzing Scott's recommendations today.
Times/Herald staff writers Mary Ellen Klas and Katie Sanders contributed to this report. Steve Bousquet can be reached at [email protected] or (850) 224-7263.