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Legislators hit hardest the pocketbooks of state workers, college students

TALLAHASSEE — After a year of incremental drops in the state's unemployment rate, Florida lawmakers came to the Capitol armed with promises to jump-start jobs, but they left handcuffed by the stubborn economy.

The 60-day legislative session that ended Friday was largely dominated by small reforms on a few pocketbook proposals. Gov. Rick Scott and the Republican-led Legislature honored their pledge not to raise taxes, an article of faith for them in an election year. But to fill a $2 billion budget gap, they cut about $300 million from universities and colleges, $1 billion from state worker pensions, and made another round of deep spending cuts in prisons, health care and social services.

While lawmakers scaled back higher education and social programs, they also delivered hundreds of millions of dollars in tax breaks to private businesses.

In a last-minute compromise, lawmakers also crafted a fraud-reform plan intended to lower premiums for the state's no-fault auto insurance system, or PIP. In the end, however, they couldn't agree on including requirements that insurers actually reduce their rates.

Despite the difficult balancing act, the self-proclaimed "jobs governor" was buoyant around midnight Friday that Floridians will see more hiring throughout the economy because of this session.

"We're going to reduce the taxes for small businesses so they can hire more people,'' Scott said during a brief speech after legislators adjourned. "We're going to reduce the regulation for small businesses so they can hire more people. We are going to make sure that the businesses in Florida out-compete any businesses in the world."

But Democrats disagreed. They noted that much of the money from the tax cuts comes from programs that already create jobs or employ state workers, and they blasted the Legislature's approach as harmful to working families and the middle class.

The $70 billion budget eliminates an estimated 4,400 state jobs and continues to rely on a 3 percent reduction in state worker salaries. A circuit court just last week declared the salary cut unconstitutional because the state failed to go through collective bargaining. The state is appealing the ruling. The budget also sweeps millions from trust funds designated for special projects, such as the more than $100 million taken from the affordable housing trust fund, including programs designed to revitalize foreclosed property and get homeowners into affordable homes.

The legislative session was "a far cry from the promises heard earlier this session about how the Legislature would focus on job creation,'' said Rep. Charles Chestnut, D-Gainesville, the ranking Democrat on the House budget committee. His biggest complaint was the impact the budget will have on families with school-age children.

"The budget sets up a devastating triangle against students in working families through a combination of tuition hikes, cuts in university funding and reductions in student financial aid,'' he said.

Here is a look at the session's impact on a handful of pocketbook issues:

Jobs

The Legislature's jobs program consisted primarily of tax credits for an assortment of businesses. Although Democrats tried to require the tax credits produce actual jobs, they succeeded only in getting a commitment from the Senate president to study the effectiveness of the economic development incentives.

Businesses also get a boost from changes to the state's unemployment compensation system, which would become the "re-employment assistance program." The amount businesses pay to cover employees in the system will drop from $171 per employee to $121 per employee. The shift, however, increases the state's debt to the federal government, which could balloon in 2016.

Workers enrolled in the Workforce Education programs will see tuition rise 5 percent. A pilot program will be created to recruit and assist adults who want to work to complete their degrees in high-wage, high-skill areas. A proposal to change the minimum wage scale for tipped employees died in committee. The 3 percent salary cut for all state and local employees in the Florida Retirement System continues this year, allowing the state to reduce its contribution to the retirement fund by $1 billion.

Fees

There were no major fee increases this year but there were a handful of small rollbacks in some programs. For example, gun owners will see fees drop for concealed weapons permits, with the maximum dropping from $85 to $70; renewals will decline from $70 to $60.

People convicted of a crime will now be required to pay a $100 fee for any crime lab services provided by the county.

Military veterans seeking licenses in state-regulated professions will no longer have to pay initial license fees, application fees and unlicensed activity fees as long as the veteran applies within 24 months of being honorably discharged. They will also be eligible for driver's licenses designated with the letter "V" that will allow them to be exempt from driver's license fees.

Schools

The cost of attending college in Florida will rise in many ways. Community college students will see tuition increase 5 percent, while university students could see increases of up to 15 percent. Those attending the University of Florida or Florida State University could see even higher tuition if the governor supports a plan to allow those schools to boost tuition to "market" rates.

Student financial aid will drop by 4.4 percent, or $487 million. Bright Futures scholarships, which pay for high-performing high school students to attend state universities and colleges, will be cut by 5 percent this year and students will have two years, instead of three years, to collect on the initial scholarship after leaving high school. Universities were also allowed to charge students up to $2 per credit hour more to pay for capital improvement projects.

Meanwhile, legislators diverted $39 million in higher education spending to create a 12th university in Lakeland, the pet project of Sen. JD Alexander, R-Lake Wales.

Parents of children in state-subsidized prekindergarten programs, known as VPK, could see their costs rise under a new sliding fee scale that gives priority to children from ages 0 to 5.

Homeowners

Those who sell their homes will continue to pay the documentary stamp tax on mortgages, but lawmakers redirected the $100 million expected to be raised from the tax to the state's general revenue account — not to provide housing assistance and rehabilitation funds for foreclosed properties. Homeowners facing foreclosure, however, may have to wait a bit longer also because of budget cuts. A $30 million reduction in the clerk of courts budget prompted county officials to warn that foreclosure proceedings and other court services will continue to be backlogged throughout the state.

Legislators also passed a proposed constitutional amendment for the November ballot that would give additional homestead property tax exemptions to the spouse of a military veteran or first responder killed in the line of duty.

Health care

For the first time, children of state employees, who qualify for the state-subsidized Kidcare health insurance program, will be eligible to take advantage of the services.

Meanwhile, the state continues its program to convert Medicaid into a managed care program, this year expanding it to include individuals diagnosed with HIV/AIDS. Except for pregnant women and children, Medicaid recipients would be limited to six emergency room visits per year.

Legislators hit hardest the pocketbooks of state workers, college students 03/10/12 [Last modified: Saturday, March 10, 2012 9:55pm]

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