1. Florida Politics

Legislators make few repairs to Florida's safety net but push back on tax cuts

Florida Senate President Andy Gardiner, R- Orlando talks with the Tom Lee- R- Brandon, Senate Appropriations Chairman. (SCOTT KEELER   |   TIMES, 2015)

Florida Senate President Andy Gardiner, R- Orlando talks with the Tom Lee- R- Brandon, Senate Appropriations Chairman. (SCOTT KEELER | TIMES, 2015)
Published Feb. 12, 2016

TALLAHASSEE — Something strange was happening in the halls of the Republican-led Legislature as it passed the halfway point of its annual session.

With a budget flush with more than $1 billion of additional revenue, lawmakers are locked in a debate over whether to back a budget that restores $1 billion in cuts to the state's tattered safety net for the state's most vulnerable children, disabled and elderly — as the state Senate proposes — or returns it to taxpayers in the form of tax cuts, as the House and Gov. Rick Scott propose.

For Republicans who came to office reflexively touting less government and lower taxes, it's an uncommon debate to have, but Senate leaders are also arguing something so unthinkable that few Republicans have uttered it before: They are calling the governor's tax cut proposal unsustainable and irresponsible.

"Who is the most conservative, who is the most responsible individual — the person who cuts the most taxes, or the person who lives within their means?" asked Senate budget committee chairman Tom Lee, R-Brandon, on Thursday as he defended his chamber's $81 billion spending plan. The proposed Senate budget includes no tax cuts but has $1 billion more in child welfare, education and prevention programs than the House.

Lee told reporters: "We want to live within our means over here, and we believe our outlook documents suggest that we would be betting the farm on a high-level tax cut."

Florida's budget has rebounded since the Great Recession when lawmakers stripped billions from its spending plans from 2008 to 2013 and revenues are expected to be more than $10 billion higher than Scott's first budget in 2011 — about $1 billion higher than last year. The new money presents lawmakers with ample choices and, while they have not made restoring cuts to programs a priority, the shifting conversation has lawmakers in both the House and Senate reacting cautiously to the governor's call for permanent reductions in the state's tax base.

Legislators and the governor tout the fact that in the past three years they have restored most of the recession-forced cuts to K-12 education. What they fail to note is that many social service programs that had been deeply cut, or prevention programs that have long been neglected, remain close to below their pre-recession levels.

The hardest hit were the programs with the fewest advocates — health care for the poor, spending on the disabled, the elderly and at-risk children, and the agencies that shoulder the unpopular job of policing prisoners.

Several House and Senate leaders interviewed by the Times/Herald say that while there is support for restoring cuts to many programs, Republicans also wrestle with a fundamental ideological question: Should the safety net be government's job?

"It seems like the more we send a message to society that they don't have to do their part, government will take it on," Lee said. "And yet, if we fail to invest in these children, we know they end up dropping out. They end up in our criminal justice system. They end up in our social services programs. We have this box canyon where you pay us now or you pay us later."

Recurring reductions

The more conservative House is more willing to accept a permanent reduction in the state's revenue stream through tax cuts, but is proceeding cautiously. The House rejected the governor's biggest request — the permanent elimination of corporate income taxes on manufacturers and retailers, estimated to reduce state revenues $770 million a year — and on Thursday voted to pass out a $1 billion package of wide-ranging tax cuts.

However, unsure of the state's economic outlook, half of the House tax cuts take effect for only one year.

"We're actually looking at where there's holes before you are cutting taxes permanently," said Rep. Jose Felix Diaz, R-Miami. "I don't know if it's a systemic shift or a timing issue that's been many years coming."

When Lee, the Senate budget chairman, was Senate president from 2004-06, he initiated the constitutional amendment requiring lawmakers to prepare a three-year financial plan to determine the long-term effects of their short-term budget decisions. He now argues that the more time legislators spend understanding the state's budget process, the more cautious they become.

"It's easy when you're campaigning to have these doctrinaire views, but then once you become better educated and informed you realize that government does have a role — albeit a limited one in people's minds — and the question is how do you get a return on investment for all these tax dollars that are being given," he said.

Lee said push back over tax cuts is a sign that Republicans who have controlled state government in Tallahassee since 1996 have reached a crossroads and must find a new message.

"It's getting harder for Republicans to craft a narrative that defines their public policy positions because we've been at this for 20 years and the low-hanging fruit's been picked," he said. "We've cut taxes 50 times in the last 20 years. That mail piece is already done. ... What I think it's important to focus on is the structural problems we're facing in our system."

In November, Florida TaxWatch, the business-backed fiscal research group, added fuel to the argument with a report on the long-term cost of the state's failure to properly invest in its child welfare system, "Challenges Facings Florida's Community-based Child Welfare System."

It was unusual for the organization known for promoting business-backed tax cuts and compiling an annual list of budget turkeys to do something rarely seen in Tallahassee: connect the dots on the cost of the state's failure to provide a safety net for the state's most vulnerable.

Turnover turmoil

But the TaxWatch report found that the state spends $14 million a year training new child welfare workers because of a 37 percent turnover rate at the Department of Children and Families, yet the cost to the children in foster care is much higher. Each child that spends a year in foster care costs the state $70,000 and, because of staff turnover, many children stay in foster care longer than they should.

When a child has four case workers, the odds that each child will find a permanent home by the time he or she reaches 18 drop to four percent, the report found. Once the child reaches age 18, the state doesn't have an obligation to pay for their care any longer but each child who ages out of the foster care system has a one in four chance of getting arrested, a 50 percent higher chance of getting pregnant, a 33 percent chance of dropping out of school and a 65 percent chance of becoming homeless.

"What is the cost of not investing? We have to keep in mind those are people's lives and the failure to invest in people is just unacceptable," said Robert Weissert, a TaxWatch researcher.

Meanwhile, subsidies to foster parents who adopt children have been cut to levels lower than they were before the recession, and the number of at-risk children has risen 14 percent.

If the report got any attention, you wouldn't know it from the budget roll-out last week by House and Senate leaders, none of whom mentioned the correlation between child welfare and higher safety net costs. But Kurt Kelly, president of the Florida Coalition for Children, says the resistance to investing new money in the child welfare system is melting.

Both the House and the Senate are recommending a total of $14 million for additional case management workers through the community-based care lead agencies but neither the House nor Senate uses recurring money to pay for all of it, forcing them to have to return each year to get the money.

The House budget has set aside $7 million in recurring money to help hire staff while the Senate has set aside $9 million.

Kelly said a financial analysis found that the network of community-based care organizations for child welfare is about $100 million short of where it should be to prevent worse outcomes for children in its care.

The same themes run through just about every area of the state's safety net and public safety programs: insufficient staffing levels leading to high staff turnover; high staff turnover increasing the cost of training and recruitment; training and recruitment costs draining the budget for staff and leading to more turnover.

Three state audits have determined that budget cuts since 2010 have so decimated staff and infrastructure at the Florida Department of Corrections, which is responsible for nearly 100,000 inmates, that turnover is at close to 50 percent, many state prisons are constantly violating safety rules and the most dangerous prisons operate with staff with less than two years experience. Neither the House nor Senate have provided the money needed to fully staff the prison system, although each increases some funding.

Waiting lists

For the elderly awaiting state services, the numbers also are grim. Last year, more than 6,000 people died while waiting for community-based programs, seeking in-home care or long-term managed care, according to the Department of Elder Affairs and obtained by Rep. Mark Pafford, D-West Palm Beach.

The proposed House and Senate budgets chip away at the waiting lists for the disabled, child care, and long-term care for the elderly, but even with new funding, 2016-17 is expected to be another year in which more elders leave the lists because of death than because they received services.

If the House budget were to be approved, the waiting lists for the coming year would include: 42,000 seeking Medicaid-funded long-term care; 35,000 waiting for community-based services; 19,000 children and adults with disabilities who seek state services, and 65,000 children on waiting lists for subsidized child care.

Child advocates say that one of the long-term costs of having so many at-risk kids unable to get high-quality pre-school will have consequences for a generation. The state's Voluntary Pre-K program is funded at a lower rate than it was when it was first implemented in 2005, resulting in less effective results. The cost of bringing the program to pre-recession levels: $45 million, or $2,700 per child. The House budget proposes increasing funding by $12 million, while the Senate increases it $6 million.

"There is very clear research to show that a child who doesn't read at grade level by third grade has a 400 percent likelihood of not graduating high school," said Vance Aloupis, state director of the Children's Movement. That adds up to a loss in earnings and taxes of $260,000 per dropout, the TaxWatch study found.

Based on 2014 FCAT scores, 43 percent of third-graders in Florida public schools were not reading at grade level, and 45 percent of 10th-graders could not read at grade level — leaving the next generation potentially seriously unprepared for the workforce, Aloupis said.

"We have gotten into such a pattern of being reactionary that we fund failure in a much bigger way than we fund prevention," said Karen Woodall, executive director of the Florida Center for Fiscal and Economic Policy, a liberal, Tallahassee-based research group that has organized rallies and lobbying efforts for years to encourage legislators to restore cuts to social service programs.

Part of the reason lawmakers are slow to understand the need to restore funding to programs is the recession hit Florida before the governor and most of the Legislature came into office, said Diaz, the Miami Republican.

"Cutting taxes was fundamental in all our campaigns, and the budget grew very quickly after having dipped," he explained. "I think when there was a ton of money, everybody tried to cut taxes in a big way, but we're now making sure we're not just blindly cutting taxes."

House budget chair, Rep. Richard Corcoran, R-Land O'Lakes, who has been designated by Republicans to be the House speaker next year, said he believes there never will be enough money to satisfy the advocates of the state's most vulnerable, but he wants to see the future budget process be less project-based and more focused on "systemic funding for things that have been funded and work."

The governor, who was a newcomer to politics when he was first elected in 2010, used his State of the State speech in January to make a rare reference to a government "safety net" noting that "the truth is, for those in dire need, we need to provide a safety net." But Scott also indicated he was pleased with the state's level of funding for those programs — then made the case for the naysayers.

"Government assistance must be the very last resort, not the first," the governor told lawmakers. "Government does not create prosperity, and it never has. Top-down mandates from big government are artificial and not sustainable."

Contact Mary Ellen Klas at Follow @maryellenklas.