Gov. Bush proposes dramatic changes to Medicaid, the state-federal health care program for the poor.
By ALISA ULFERTS and STEVE BOUSQUET, Times Staff Writers
Published January 18, 2005
TALLAHASSEE - Buoyed by Wall Street's recent endorsement of Florida's fiscal thriftiness, Republican Gov. Jeb Bush is expected today to unveil a spending plan that cuts taxes, borrows less and reins in social service spending.
Manufacturers, researchers and investors are expected to see a windfall, environmental preservation will proceed without going deeper into debt and the impoverished sick could feel the pinch.
Bush plans to unveil an estimated $59-billion budget proposal today that will continue his policy of aggressively stockpiling reserves - another $1.6-billion this time - in case of emergency. Bush said the state's ability to withstand four severe hurricanes in a six-week stretch last year proved the soundness of this approach.
"Florida is actually more robust than the supposed broader tax bases of other places," Bush told reporters last week as he announced an upgrade in Florida's bond rating, a sign of confidence from Wall Street that means it will cost less for the state to borrow money.
Bush's budget is merely a recommendation. The Republican-controlled Legislature will have its own ideas. The two sides must agree on a budget by July 1.
Bush's words last week were in stark contrast to what he said a year ago, when he spoke of the "difficult choices" of lean times.
This year, Bush and the Legislature will have between $3-billion and $4.5-billion extra thanks to a strong economy and a surge in sales tax collections on lumber, generators and other items after Florida's four hurricanes last summer.
Even so, Bush likely will recommend modest trimming in some social service programs, particularly Medicaid. The governor has proposed dramatic changes to the mushrooming state-federal health care program for the poor, but it will take at least a year.
To maintain its upgraded bond rating, however, Moody's Investors Service told Florida to rein in the spiraling cost of Medicaid and find a dedicated funding source for the voter mandate to shrink school class sizes.
That worries some Democrats, who say continuing to offer tax breaks while paring away at social service programs amounts to a "reverse Robin Hood-type of class warfare."
"Democrats believe that middle class families are paying too much in taxes and that everyone should be paying their fair share, including Florida's highest-income earners," said Steve Schale, spokesman for the House Democratic Caucus.
Bush also is expected to recommend more cuts in the state's tax on investments now that state tax collections are on the rise. That already has the support of the chief budget writer in the House.
"It's time to eliminate the intangibles tax, once and for all," said Rep. Joe Negron, R-Stuart, chairman of the House Fiscal Council.
Bush's budget is expected to include a $70-million tax break for Florida manufacturers and private research companies that he announced last month. Bush's contention: With nearly $3-billion more in state revenue available next year than the state will spend this year, it makes sense to invest some of the money in manufacturing and research industries by giving them tax breaks other states already provide.
Bush has kept most of his proposal under wraps. But his office announced several items ahead of today's unveiling, including:
--Reading programs will get $186.4-million.
--Launching the first year of voluntary prekindergarten will cost about $350-million.
--The environmental land-buying program, Florida Forever, will get $300-million.
--The Save Our Everglades program will get $100-million.
--School construction to reduce class sizes will get $86-million.
