Gov. Scott’s Budget Message

Press Release: After months of traveling the state and listening to teachers, parents, students, small businesses owners and families, Governor Scott today unveiled a budget that reflects the issues and solutions most important to Floridians – funding education and helping Floridians create jobs.

“The dollars in this budget belong to all Floridians, and I have listened to the things they believe are important to spend these dollars on,” said Governor Scott. “I have heard loud and clear that Floridians want their money spent on education and jobs, without additional burdens on families and businesses, and this budget accomplishes that.”

Highlights of the $66.4 billion proposed budget for Fiscal Year (FY) 2012-2013 include:

· Over $1 billion in new state K-12 funding.

· New tax relief measures totaling nearly $35 million in taxpayer savings next year, and over $86 million in FY 2013-14.

· Injecting $300 million in the Florida Retirement System pension fund.

· Reducing state spending by 4.6 percent – close to FY 2005-06 levels.

· Adjusting Medicaid reimbursement methodologies to control soaring costs.

· Efficiencies and savings for Florida taxpayers as a result of 40 year low crime rates.

Education – $1 Billion in new State Education Funding

This budget year, Florida faced significant education funding challenges. Florida gained 30,000 more students that require almost $200 million more in state funding. Florida also faces a $400 million reduction in ad valorem taxes, due to declining property values, and one-time state education funding. Despite these challenges, the budget Governor Scott is submitting to the Legislature will include:

· Over $1 billion in new state K-12 funding.

· Raises per student funding to $6,372, including 30,000+ addition children in the public school system and less local funding due to declining property values.

· The 3rd largest amount of state K-12 funding in Florida history at $9.5 billion.

“Let me be clear about this education budget,” said Governor Scott. “I will not sign any budget into law that doesn’t contain more state dollars for education than we have this year. I am absolutely committed to acting on what I have heard and prioritizing education funding in this budget.”

Small Business Tax Reform

A number of small business tax reform measures give Florida businesses the competitive advantage needed to create the jobs, including:

· Increasing the business tax exemption again this year from $25,000 to $50,000, eliminating tax liability for more than 25 percent of those who pay it and reducing taxes by about $25 million for all taxpayers.

· A tangible personal property (TPP) tax exemption for those with less than $50,000 of TPP, providing an overall tax relief of about $22 million, if approved by the voters.

· Broadening the sales tax exemption for manufacturing by lowering the percentage expanding businesses must increase output from 10 to five percent, because Governor Scott is committed to making sure manufacturing can grow.

Pension Reform

This budget places approximately $300 million into the Florida Retirement System pension fund: $180 million of new state funds to fully fund the normal cost, plus an additional $120 million toward the unfunded actuarial liability.

“We must be serious about fixing Florida’s pension fund in order to protect our ability to fund important priorities like education and jobs,” said Governor Scott. “The pension as it is now is a major liability for the state that will threaten other priorities if we do not talk honestly about its status with state employees.”

Controlling Rising Medicaid Costs

The Governor’s budget finds significant savings from improving efficiencies in the way Medicaid hospital providers are reimbursed for inpatient and outpatient services and other efficiencies for hospital stays and emergency room visits. To create a more fair reimbursement methodology, the Governor’s budget proposes paying similar rates for the same procedures in similar hospitals by creating a “flat rate” for hospital groups using averaged cost data.

“No program has grown as fast and as much as Medicaid, and we must find a way to control the cost. If we do nothing, this program will bankrupt our state,” Governor Scott stated.

Criminal Justice Reform

Because of our strong commitment to criminal justice reforms, the state’s prison population is shrinking, and Florida is experiencing a 40-year low crime rate. Floridians deserve to see some efficiencies as a result. Florida has the opportunity now to find efficiencies in the prison system so that more of the dollars going to prisons can be spent on education and igniting job growth.

Heading in the Right Direction

Florida is heading in the right direction. Florida has gained 106,900 net new jobs since January with a total of 118,000 jobs in the private sector. In addition, Florida’s unemployment rate is at its lowest point in 28 months at 10.3 percent. Under Governor Scott’s leadership, and shaped by input he received from educators, families and business owners, Florida is doing the right things to keep the cost of living low, get the state back to work, and create a world-class education system that prepares students for a job.

“I would like to thank all of the Floridians – small business owners, job creators, parents, teachers and students – that took the time to talk with me over the past few months. It has been an important and meaningful dialogue and I hope they will continue to let me know what they think,” Governor Scott said.

To view the Governor’s full budget proposal, visit http://letsgettowork.state.fl.us/