The TaxWatch Research Blog

The TaxWatch Research Blog is a forum where our research staff can address topics and issues in a short format. Keep an eye on this space during Legislative Session for frequent posts making sense of the activity at the Capitol. 

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Budget Negotiations Take a Turn for the Worse

This morning the House convened a special meeting of the Appropriations Committee to pass what it called a continuation budget, or a standard operating budget (SOB).  The means the same budget as last year with all non-recurring appropriations taken out.  Funding levels would mirror current spending, with some necessary changes to address things like increasing Medicaid costs and more public school students.  The House Appropriations Chair today said this was “Plan B”—a backup budget if a compromise cannot be reached. It was also portrayed as a “take it or leave” offer to the Senate.  The Senate President said they will leave it. 

This is the latest development in a contentious budget process that threatens an on-time finish to the 2017 Session. The House and Senate spending plans are effectively $4 billion apart and leaders are holding fast on some key issues.  Some of the major differences include environmental funding, economic development programs, tourism marketing, the amount of local property taxes for public school funding, universities, member projects and state employee pay raises.  House also funds 1,335 fewer state employees than the Senate and generally appropriates less money for agency operations. For more information on what is in the tow budgets, see the new Florida TaxWatch Budget Watch.

Formal budget conference negotiations have not yet begun but there have been behind-the-scenes negotiations.  Conflicting rumors have surfaced on what, if any, progress is being made. One thing is clear, they have not gone smoothly. 

The Legislature is running out of time to pass the budget before the session ends on May 5. The state constitution requires a 72-hour review period after the conference report is printed before it may be voted on.  If history is a guide, the conference would have to begin tomorrow for a timely completion of the budget and that includes working over the weekend.   If it fails to do so, lawmakers will have to come back in an extended or special session to pass a budget before the new fiscal year begins on July 1. 

If the new budget proposal by the House is truly a continuation budget, it actually has some appeal, and a preliminary examination of the nearly 400-page document suggests that it is.  For one thing, it would leave $3 billion is general revenue reserves, which would go a long way in addressing the significant budget shortfalls forecast for the next two years.  No state program’s budget would be cut (which could be good or bad, depending on the program), but no new initiative would be funded (ditto).  This would be good news for two programs Florida TaxWatch supports and would be two major concessions by the House.  Enterprise Florida would be saved and the recurring funding for Visit Florida would not be cut ($26 million in non-recurring would go away.) 

It would also eliminate not only turkeys, but virtually all member projects, since they are funded with non-recurring revenue.  The new member project rules did add some transparency to the process and hopefully will eliminate the last minute addition of member projects, but the rules did not limit them.  This is particularly true in the Senate, which has $700 million in local projects sprinkled throughout its proposed budget.  Of course, some member projects are very worthwhile and provide essential services to Floridians (albeit on a less than statewide basis).  This was the main complaint by Democrats opposing the continuation budget this morning in Appropriations—they read a litany of local programs that would not be funded through this budget.

Despite these features, this is no way to budget.  The taxpayers of Florida deserve better.  There are now rumblings of a deal on a basic budget framework and allocations for the various appropriations subcommittees could be released soon, which would set the stage for a budget conference.  The Legislature needs to put aside their differences and negotiate a fiscally responsible budget all Floridians can be proud of.  This includes taking some of the features of the continuation budget--not crippling Florida’s economic development and tourism marketing programs, keeping the Agency for State Technology intact, holding down the school property tax increase, limiting member projects and reducing spending enough to significantly address future budget shortfalls.

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