The governor wants the $1.1-billion in new money to pay down debt and help businesses and Medicaid.
By ALISA ULFERTS
Published March 16, 2004
TALLAHASSEE - Gov. Jeb Bush on Monday urged lawmakers to use a $1.1-billion windfall to avoid debt, provide a new corporate tax break and plug a hole in the exploding Medicaid budget.
The governor's new recommendation came three days after state economists revised their estimate of how much state tax money will be generated next year.
Bush wants to devote $592.4-million, or nearly half the new money, to build new classrooms and buy environmentally sensitive land. He had proposed borrowing that money. That will save taxpayers almost $60-million in interest, the governor estimated.
The governor also proposed adding $294-million to Medicaid, which provides health care for the poor. Florida will spend more than $14-billion next year in state and federal dollars on Medicaid, and the state faces a $315-million deficit this year. The money would not be used to restore cuts in reimbursement rates Bush is proposing.
Bush also wants lawmakers to link Florida's corporate income tax code to the federal code, which would allow the state's businesses to speed up their depreciation write offs for post 9/11 capital improvements. This would cost the state about $137-million. The Legislature did the same thing two years ago, which cost $262-million.
"My recommendations will maximize Florida's efforts to pay down state debt, address critical service needs and provide incentives to keep our state's strong economy growing," Bush said.
Bush already has recommended cutting the tax on stocks and bonds owned by about 233,000 investors. He also recommended a nine-day sales tax holiday on school purchases this summer and a monthlong sales tax break on books in May 2005. Those cuts add up to $131-million.
The House and Senate have not released budget plans, though both are expected to propose some tax relief.
House Speaker Johnnie Byrd, R-Plant City, is a strong supporter of the next phase of the intangibles tax cut as well as the school tax holiday.
Senate President Jim King, R-Jacksonville, has said the holiday will likely find support in the Senate, but the intangibles tax cut could be a tough sell among moderate senators who are wincing at the cuts expected in health care and other social programs.
Senate Appropriations Chairman Ken Pruitt, R-Port St. Lucie, and the top budget writer in the Senate, supports Bush's call to reduce the state's new debt to about $544-million. That would be less than half the debt the state usually takes on each year - estimated at $1.176-billion over the past 14 years.
"The governor has done an excellent job," Pruitt said.
The Senate may differ with the governor on some details, but the recommendation is "a template from which we can start," Pruitt said. That's a stark contrast from the rancor of last year, when lawmakers were forced into special session to pass a budget.
Bush's proposal also was warmly received by the Independent Colleges and Universities of Florida because it would boost average spending on tuition grants for students at the state's private colleges from $454 to $2,705.
House Democratic Leader Doug Wiles. D-St. Augustine, praised Bush's recommendations to avoid debt.
Rep. Carole Green, the Fort Myers Republican who oversees health care spending in the House, said she wants to study the governor's recommendations before she incorporates them into a spending plan.
"We'll certainly look at what he's done, but we need to make or own decisions. Regardless of the good news we got on Friday, the fact is we still have a lot of challenges in the Medicaid budget," Green said.
- Times staff writer Steve Bousquet contributed to this report, which includes information from the Associated Press.
