Florida’s $ 99.7 billion budget proposal garners praise and criticism

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When the Florida legislature returns on Jan. 1, one of its first items will be to consider Gov. Ron DeSantis’ proposed budget of $ 99.7 billion for fiscal year 2022-23.

The governor’s recommended spending plan for fiscal year 2022-2023 is down 1.8 percent from the adopted budget of $ 101.5 billion for the previous fiscal year. This is in large part because of the federal funding that has poured in from Washington.

Under the American Rescue Plan Act, Florida is expected to receive approximately $ 10.2 billion in funds, with counties receiving approximately $ 4.2 billion, cities $ 1.5 billion, and other local governments 1, $ 4 billion.

Florida Governor Ron DeSantis has proposed a budget of $ 99.7 billion for fiscal year 2022-2023.

Bloomberg News

Florida General Bonds are rated triple A by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings. As of Nov. 30, state issuers had sold more than $ 15 billion in bonds this year, according to Refinitiv data, placing Florida fifth in the country.

The governor’s office said the “Freedom First” budget provides record funding for K-12 education and promotes infrastructure and transportation initiatives, environmental projects and bonuses for first responders and the police.

The budget proposal also maintains historic reserve levels of $ 15.3 billion, including $ 10.6 billion in unallocated general revenue to respond to any unforeseen emergency, $ 3 billion in the Fiscal Stabilization Fund and 1, $ 7 billion in unallocated trust funds.

The recommendation also includes four tax exemptions, including a fuel tax exemption; a seven-day sales tax holiday; a 10-day tax holiday for the start of the school year; and a 10-day tax holiday for disaster preparedness.

The Florida Policy Institute, a non-partisan nonprofit, noted that the proposed budget made no significant changes to the state’s tax code.

“While Governor DeSantis has expressed support for maintaining state sales tax exemptions, research shows these offer little to no relief for people who are struggling to make ends meet,” FPI CEO Sadaf Knight said in a statement. In addition, the temporary $ 1.1 billion reduction in the gasoline tax, which is not a real solution to the tax code, will be ineffective in increasing household incomes of low and moderate-wage Floridians. long-term.”

He said the state’s continued rebound depends on changes to the tax system.

“Our long-term economic recovery in Florida will be hampered without comprehensive tax code reform,” Knight said. “When federal funds for COVID recovery eventually run dry, it is important that the state put measures in place – like closing corporate tax loopholes and expiring corporate tax cuts and refunds. corporations in 2022, as they’re supposed to – that ensure Floridians and wealthier businesses pay what they owe in taxes, while implementing reforms that bring real relief to low- and middle-income residents.

Some of the most controversial elements of the budget revolve around illegal immigration and the integrity of the elections.

DeSantis proposed $ 8 million to create a program that “would help state efforts to protect against damage resulting from illegal immigration, and could include the transportation of unauthorized aliens located in the state to d other states of the United States of America, or the District of Colombia.

As a potential presidential candidate in 2024, DeSantis has often fought with President Joe Biden over a multitude of issuers ranging from immigration to taxes to vaccine warrants.

The Republican Party dominates Florida State House, controlling both the House and the Senate. And for the first time in state history, Republicans outnumber Democrats among registered voters,

Democrats have criticized the budget, saying it ignores the need for more services and does not help provide affordable housing.

The governor’s budget also includes $ 39.8 million for state-level election monitoring activities, with an emphasis on election integrity and security. This includes money for a new 52-member Election Crimes and Security Office, which would be tasked with investigating election crimes and fraud. It also includes funds for cybersecurity initiatives and electoral system improvements.

“As cybersecurity threats continue to become more sophisticated, it is critical that Florida has the tools to protect critical state resources and sensitive information,” the budget proposal said.

Separately, the budget includes $ 50.6 million for various state agencies for security intelligence, modernization, and resilience.

DeSantis also wants to create a “Florida Friendly Crypto” by providing $ 250,000 to support a blockchain title pilot program within the Department of Highway and Motor Vehicle Safety; $ 250,000 to the Florida Agency for Healthcare Administration for a pilot project using blockchain technology to authenticate Medicaid transactions and identify fraud; and $ 200,000 to the Department of Financial Services to allow businesses to pay fees using cryptocurrency sent directly to the Department of State.

Florida aims to encourage the use of cryptocurrency as a medium of commerce that will make the state more attractive to businesses and promote economic growth.

The Republican Party dominates Florida State House, controlling both the House and the Senate.

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The city of Miami and Miami-Dade County have supported initiatives to support the growth of blockchain and cryptocurrency.

Focusing on infrastructure, the governor said the ability to move people and goods quickly and efficiently depends on developing and maintaining world-class transportation infrastructure. He estimates that for every dollar invested in transportation, there is up to $ 4 in economic benefits for residents and businesses.

The budget includes $ 10.4 billion for the Florida Department of Transportation, including $ 9.27 billion for the state’s Transportation Work Program, a five-year plan for infrastructure projects that include roads, bridges, railways, seaports and public transport systems.

The budget also includes $ 105 million for the rural infrastructure fund to support projects such as roads, storm and sewage systems, and telecommunications facilities.

For public education, the budget allocates $ 23.9 billion in total funding to the Florida Education Finance Program, which includes a record $ 13.3 billion for the K-12 public school system.

Other investments include $ 600 million to continue the state’s priority of increasing the minimum wage for K-12 teachers to $ 47,500, as well as salary increases for veteran teachers and 1.4 billion dollars for early childhood education.

It also includes $ 1 million in funding to establish an out-of-state law enforcement equivalent reimbursement to help cover the cost of law enforcement officers moving from d ‘other states to Florida.

Since 2011, State DOT has issued $ 7.7 billion in bonds while State BOE has sold $ 11.7 billion.

For the Florida Retirement System, DeSantis is proposing an increase in employer contributions to the investment accounts of employees participating in the FRS Investment Plan by 3% of the member’s salary.

Based on the October 7 reduction of the return on investment assumption to 6.8% from 7.0% by the FRS Actuarial Assumptions Estimation Conference, the unfunded actuarial liability of the FRS defined benefit program was $ 34.7 billion as of June 30. Based on an actuarial liability of $ 209.6 billion and an actuarial asset value of $ 174.9 billion, the program is 83.4% funded as of June 30.

The budget provides $ 100 million for the Job Growth Grant Fund to support local infrastructure and vocational training projects targeted towards economic recovery and development and $ 50 million in recurring funds for VISIT FLORIDA tourism marketing programs.

COVID-19 will remain an unknown factor in any budget negotiation process.

As Florida’s economy rebounds, the Delta and Omicron variants could slow this resurgence in 2022.

Since the start of the pandemic, Florida has recorded more than 62,000 deaths from COVID-19. Florida’s per capita death rate of 288 per 100,000 population is more than 20% higher than that of the United States, according to Johns Hopkins data recently compiled by the Financial Times.

Florida’s unemployment rate fell 0.2 percentage points to 4.6% in October. Since April 2020, Florida has recovered nearly 90% of the jobs lost during the pandemic.

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