FEA Legislative Update

Welcome to a new decade!

While the Race to the Top business kept all of us preoccupied this week, the Legislature was back in Tallahassee gearing up for the start of the 2010 Legislative Session.  Despite the cold weather that gripped the Florida capital, things were heating up during House and Senate committee meetings.

They’ll be back in town again next week – then take a week off before returning to brighten our days for nearly the entire month of February.  We say Session begins on March 2, but in reality they’re already turning ideas into bills… and setting the course for yet another brutal budget cutting session.

In March we’ll be bringing back the weekly FEA Frontline Report to keep you informed of all the Legislative shenanigans —and the issues that impact our members that will be coming before legislators this Session.

Here’s what happened in the Legislature this week:

2010-2011 State Budget forecast: freezing with no chance of thaw

Legislators are facing a budget deficit of an estimated $3 billion as they try to craft next year’s spending plan.  Keep in mind they have already cut $6 billion in recent years. Growing Medicaid caseloads, falling property tax revenue and other budget woes mean the state is now in an even deeper budget hole than experts were predicting last fall.

The Senate Ways and Means committee members sat in silence as legislative staff explained that Medicaid costs are rising and school enrollment is exceeding expectations while the property tax receipts that support public schools have significantly dropped. Just to cover the state’s most basic costs the state will need another $1.5 billion.

State economists’ fall estimate for the 2010-11 state budget, indicated a $923 million budget shortfall if Florida was to meet its most basic needs, such as in public schools and the courts. Heap on top of that the other expenses the state usually covers —health care for low income medically needy is one example— and the predicted shortfall climbs to almost $2.7 billion.  We’ve got a problem.

One of the many fiscal troubles facing legislators as they craft next year’s state budget is the plummeting real estate values around the state. The lower property values result in fewer tax dollars for public schools. The drop in property values may mean state Legislators will have to come up with another $800 million to prevent deep cuts in school funding.

Another $147 million will be needed to cover other school costs including the class-size amendment.

Factor in other anticipated spending, plus the need for an emergency fund, and the total shortfall could exceed $3 billion.

What else is contributing to Florida’s budget woes?  We have a state tax system that is not raising enough revenue to meet new demands.

The Senate’s budget chair, Sen. J.D. Alexander (R-Lake Wales) said the financial problems will likely result in more budget cuts.   According to the Lakeland Ledger Alexander said, “Will we be able to do everything we need to do? Absolutely not. But I hope we will be able to do what’s necessary to keep us moving forward.”

He also indicated that the Senate would probably not be interested in finding any new revenue through taxes or fees to close the budget gap. Another baffling development is that the Legislature has renewed its vigor to cut taxes.  Cuts being considered are:

· A reduction in the corporate income tax – advanced by some House leaders.

· Provide some relief to Florida businesses facing a steep increase this year in their unemployment compensation taxes (although that issue would not impact the bottom line of the budget).

· A reduction in some of the fees the Legislature approved last year, including those related to license tags.

· A 10-day sales tax break for back-to-school purchases.

More bad news for Florida: the legislature will have to confront the reality that the end is coming to federal stimulus money next year— which they’ve used to prop up our state budget.  Question is: will they pass that problem on…and if so, to whom?

Legislature wants Paperwork on the Paper Work

The “Transparency Florida” work group of the Joint Legislative Auditing Committee met to discuss school district data reporting issues.  Legislators are pushing school districts to uniformly report their expenditures right down to ‘how much paper is used and how much it cost’ school by school and program by program.

Gambling Committee ‘Splits Aces’ and quickly loses $225 million

in funding for education

In a 9 minute meeting Thursday, the Florida House Committee on Seminole Gaming voted to reject the Governor’s gambling deal with the Seminole Indians … and then voted to loosen restrictions and lower the tax rate on a number of South Florida pari-mutuel establishments that offer slot machines and other gaming.

House leaders expect that the federal government will now step in and shut down the slot machines and blackjack tables at the tribe’ casinos until a new compact can be signed.

The Tribe has been operating new games under a tentative agreement with Governor Crist and had already set aside $225 million for the state’s education system.

Legislators said they rejected the governor’s proposal —but passed the pari-mutuels bill —because they did not want Florida’s pari-mutuels at a permanent disadvantage to the tribe.

Florida Business groups release “Closing the Talent Gap” report

This week the Florida Council of 100 and the Florida Chamber of Commerce released a report, titled “Closing the Talent Gap,” which recommends – among many things –  that the state’s economic future is in jeopardy if changes aren’t made to the entire education system from pre-kindergarten to college. The lengthy list of recommendations included ending or changing ‘tenure’ for public school teachers and making the FCAT an online end of the year test.

Standing with the business and legislative leaders as the report was unveiled were Governor Crist and former Governor Jeb Bush.  Jeb endorsed all the recommendations in the report while Crist would not say specifically which he backed.

House Speaker Larry Cretul (R-Ocala) and Senate President Jeff Atwater( R-North Palm Beach)indicated that legislators will consider some of the recommendations during the 2010 session. House Democratic Leader Franklin Sands, D-Weston, said Democrats could back some of the recommendations but warned that some of them would create “unproductive political rancor.”

Heard in the halls—

After the House committee rejected the Seminole gaming deal: “Let me get this straight: legislators are chastising FEA for rejecting what would be, at best, $350 million to local school districts over four years…meanwhile they are rejecting $225 million that could have gone to schools immediately?”

As always – if you have questions or would like more information, please email or call the FEA Public Policy Advocacy staff at 850-224-2078.