State: Bush's budget plan keeps status quo

TALLAHASSEE -- After three years of both significant spending increases and eye-catching tax cuts, Gov. Jeb Bush heads into his re-election campaign with a weak economy and a proposed state budget that leaves Florida treading water.

Bush unveiled his state spending plan for 2002-03 Tuesday with a flurry of charts promoting his accomplishments since he took office in 1999. But the comparisons between Bush's proposed $48.7-billion budget and the state's current budget reflect relatively little movement.

In the midst of a recession, Bush's proposed tax cuts would be the smallest since he took office. Overall spending would increase just 1 percent next year over the current budget -- and the current budget reflects about $1-billion in cuts that legislators approved last month. Slumping tax revenues forced Bush and state lawmakers to trim spending in December.

Among the highlights in Bush's proposal:

The annual sales tax holiday on clothing and school supplies would continue.

Tuition would rise for community college and university students.

State jobs would be cut by more than 3,000.

Some $450-million in cuts to social services and other programs that were made in December would be restored.

Instead of gaining ground or pursuing broad new initiatives, Bush's spending plan would enable the state to regain roughly what it lost in spending in recent months.

Bush blamed the slumping economy for keeping next year's budget modest. He stressed how much he achieved while the economic picture was rosier.

"We are living in uncertain times," Bush said.

His proposal now goes to lawmakers, who will draft the state budget during the annual legislative session that begins Tuesday. Legislators can ignore the governor's budget recommendation, but they often embrace significant portions of it. Then the governor can veto all or parts of the budget that lawmakers approve.

With education looming as the top issue in the governor's race, Bush said he proposes adding almost $1-billion to education spending. All of that increase, such as local property taxes, isn't reflected in the budget, a Bush spokeswoman said.

Where that leaves Florida is open to interpretation.

Compared to the budget approved by lawmakers last spring, overall education spending in the governor's proposal still would slightly decrease, according to budget documents released by the governor's office on the Internet. But compared to the budget after it was cut by lawmakers last month, total education spending would slightly increase.

The bottom line: While Republicans and Democrats disagree over the exact numbers, education spending would remain roughly stagnant.

Still, Bush has said education will get every dollar the state can afford. He said public education spending would increase by $726-million, or 3 percent per student, after accounting for 72,000 new students. But that increase does not account for inflation.

Nearly all of that 3 percent per student increase would come from reducing the contributions to the state pension funds by local school districts, and from higher property tax collections created by rising property values.

Bush's proposal drew skepticism from Democrats. They argued he was merely plugging some of the holes lawmakers carved out of the budget during last month's special session.

"I'm very curious to see where he's going to get a billion dollars for increases in education," said Senate Democratic Leader Tom Rossin, D-Royal Palm Beach. Without some kind of new revenue, such as a tax increase, Rossin said he didn't think it could be done.

House Democratic Leader Lois Frankel, one of four prominent Democrats running for governor, called Bush's proposal "a sleight of hand."

"Let's say your neighbors borrowed your car for a month and returned it without gas and claimed to have given you a car," said Frankel, D-West Palm Beach.

"A month ago we took $700-million out of education, and he's coming back a month later and claiming there is a billion dollar increase in education."

But Dominic Calabro, president of the government watchdog group Florida TaxWatch, said Bush's proposal goes beyond what he expected, considering the economy.

"It's a very frugal budget. We expected that. But it's a little more generous than we thought," Calabro said.

Although the budget would grow slightly under Bush's plan, Calabro said, it would do so less than the economic growth rate: the population increase combined with inflation.

"It's not quite keeping pace," he said. "It forces you to be more innovative."

Bush was creative with tax relief in his proposal. The first-term Republican, who has boasted of record tax cuts during his first three years in office, carved out token cuts for next year. They include a continuation of the popular sales-tax holiday on school clothes and supplies and a larger homestead exemption for some disabled veterans.

The governor also reminded Floridians that they soon will cease paying their share of the federal estate tax, referred to by critics as the "death tax."

He also noted that the state's "insidious" intangibles tax on stocks and bonds eventually will decrease in July 2003. That tax cut was supposed to be in place now, but lawmakers postponed it last month.

Most of Bush's presentation focused on what he has achieved in the last three years rather than what he proposes for the next fiscal year, which begins July 1. The apparent preview of the state-of-the-state address he will deliver to lawmakers next week included slides showing a reduction in the state's crime rate and an increase in job growth.

But not all jobs are safe.

Bush's plan would eliminate some 3,000 state jobs, although not all those are filled now. Many of the jobs would be lost to privatizing state services, such as human resources.

"It's not the job of a government to grow state jobs," Bush said.

The governor said his budget proposal would restore many of the programs lawmakers cut last month, such as Medicaid's medically needy program, which helps pay for health care for some low-come Floridians who are uninsured. But under Bush's plan, those enrolled would have to pay a greater share of the costs, saving the state about $29-million. The changes need federal approval.

Bush's proposal also would restore cuts lawmakers made to state attorneys' and public defenders' offices, library grants and substance abuse programs.

His proposal also includes $400-million for new, unnamed initiatives. The money also could cushion the blow if state economists project another drop in tax revenues.

Overall, health and human services spending would increase under Bush's plan, while natural resources and the environment show a slight decrease. He included $13-million in his proposal for mentoring programs and $16-million for laptops and other equipment for highway patrol officers.

An additional $9.9-million would go for screening for breast and cervical cancer, and $7-million would help prevent diseases in minority communities.

- Times Staff Writers Lucy Morgan and Anita Kumar contributed to this report.

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