COVID-19 whacked Florida’s economy last year. Unemployment soared. State tax receipts were projected to run billions of dollars behind the previous year.
Yet there was Gov. Ron DeSantis on Thursday proposing a boost to state spending by $4.3 billion during the fiscal year that begins on July 1, for a bottom line of $96.6 billion, including $2.6 billion to respond to the pandemic.
His plan includes $6.6 billion in rainy day and other reserves, amounting to 6 percent of the bottom line, and $1 billion in program reductions.
To hear the governor tell it, his refusal to maintain an economic lock-down, like many of his counterparts ordered in other states, saved the day.
That dire August forecast of plummeting tax receipts? They beat the forecast by $2.1 billion, DeSantis said during a news conference.
“We know the revenue is going to come in over projections now for these next many months. None of those increases are even included in our budget. You’re looking at hundreds and hundreds of millions of dollars between today and July 1 that the Legislature will be able to use if they see fit,” DeSantis said.
“We wouldn’t have been able to do this, I think, without trusting Floridians and supporting their right to earn a living, supporting rights of businesses to operate. We’ve led on so many things. We want to be the leader in the post-COVID environment.”
Does the governor have a point? Perhaps, said Dominic Calabro, president and CEO of the nonpartisan watchdog, Florida TaxWatch.
“It helps that you have some economic activity,” Calabo said in a telephone interview, although he acknowledged a tradeoff with exposure to the virus.
“But what’s also incredible is that so much of the economy can be conducted virtually. And I don’t just mean online sales. People are buying homes; they’re building homes like crazy. Selling appliances left and right, both online and in stores. Commerce is being done with or without the pandemic far more than I imagined,” he said.
The problem is that the billions in federal relief Florida has been drawing will not last forever. Unless the state gets its spending under control, “we’re going to have a lot of recurring expenditures without the recurring revenue to pay for them,” Calabro said.
“We’re hoping that by helping to grow and stimulate Florida’s economy organically, and to continue the population growth we continue to have, we’ll offset a lot of that pain. But it won’t eliminate it. There will have to be some sizeable recurring reductions.”
The spending plan will go to the Florida Legislature, which is set to convene in regular session in early March. DeSantis’ fellow Republicans run both the House and the Senate but they are not obliged to go along with the governor’s priorities — and governors almost never get everything they ask for in a budget.
Those priorities include:
—$550 million to continue increasing public school teacher salaries to $47,500, a continuation of one of DeSantis’ priorities last year; increasing the amount the state spends per public school students by $233; and $110 million for mental health programs in the schools.
—$473 million for Everglades restoration and $50 million for springs restoration; $144 million for water-quality improvements; $25 million to fight toxic algal blooms and red tide; a four-year, $1 billion plan to cope with sea level rise and localized flooding.
—$50 million for local infrastructure and job training; $50 million for tourism promotion; $50 million for the state’s “road fund,” which targets local transportation problems including road widening.
The document also includes better pay for corrections officers, improvements to crime databases, and support for military families plus more than $423.3 million for affordable housing.
“This money is needed to repair and produce housing that is desperately needed by Florida’s essential workforce and most vulnerable residents,” said Jaimie Ross, facilitator of the Sadowski Coalition, which advocates for affordable housing, and president of the Florida Housing Coalition.
“It is needed to help Florida families to become homeowners at a time when interest rates are low. And it is needed for households that cannot pay rent or make mortgage payments due to the COVID crisis and do not qualify for the restrictive federal assistance.”
The environmental spending drew praise from Eric Eikenberg, CEO of the Everglades Foundation.
“This continued investment in America’s Everglades will not only help build critical water infrastructure that will advance the restoration of a national treasure, but it will create and save jobs, boost our state’s tourism-based economy, and yield tangible benefits for Floridians,” he said in a written statement.
“This funding has always been important, but it is essential now to support Florida as our economy rebounds from the impacts of the pandemic.”
Emmett Reed, executive director of the Florida Health Care Association, praised DeSantis for preserving a $105 million increase in Medicaid money for nursing homes.
“Florida’s nursing centers remain on the front line of the COVID-19 pandemic, and they have faced significant financial challenges in their efforts to keep their residents and staff protected from the virus. This funding is critical, not only to facilities’ ongoing response to COVID, but also to ensure measurable advances in quality care can continue,” he said in a written statement.
Nikki Fried, the Democratic commissioner of Agriculture and Consumer Services, lamented the governor’s plans for her department. The budget document showed that her agency would be cut compared to the current fiscal year.
“This budget meets the bare minimum standards to operate our department’s wide-ranging responsibilities, from promoting Florida agriculture and feeding children to supporting our wild-land firefighters and law enforcement personnel,” she said in a written statement.
Other agency budgets face cuts as well compared to existing spending, including Environmental Protection, the Fish and Wildlife Conservation Commission, and the Department of State.
Agencies in line for increases include the Agency for Health Care Administration, the Executive Office of the Governor, and Education.
“We realize that this is going to be a tight budget year, but now is not the time to divert any funding from our public schools,” Andrew Spar, president of the Florida Education Association, said in a written statement.
“Our state must continue to invest in public schools, and to invest in our students and the teachers and support staff who serve them. When the pandemic struck, educators stood in the gap and overcame tremendous obstacles to meet students’ needs. Now our lawmakers need to step up and not only protect but enhance funding for our public schools. For the good of our state and our students, public education must be well-positioned as we start coming out of this pandemic,” Spar said.
“It’s been a very difficult year,” DeSantis conceded.
“We’re in better shape because we made decisions that benefited the state. I think other areas have done things that have really, really destroyed their societies, their economies. Maybe they’ll come back, but I think it’s going to a lot easier for Florida because we took a lot of steps early and we kept the state afloat.”
The state managed to avoid raiding its trust funds, each of which is supposed to be dedicated to specific purposes, including the rainy day fund, the governor said.
In December, the state collected $330 million in taxes above the forecast, he said, adding: “We know January is going to be over forecasts for sure.”
DeSantis had vetoed some $1 billion in spending in the state budget for the 2020-21 fiscal year and told agencies to hold back 6 percent of their budgets — totaling $800 million — in light of the COVID economic slump. Additionally, more than $4.5 billion in federal relief served “as an important bridge for us,” he said.
The budget proposal does not include recently passed federal education assistance, DeSantis said; he promised details on that soon.
“For those who were saying that education is just going to get whacked, I think we’re showing, No.”
He also argued that he expects the federal government to ante up some money to help Florida and other states recover, because of alarmist warnings as the coronavirus began spreading in March and April — although he did not mention his close ally, Donald Trump, by name.
“They’re one of the reasons why we had all the budget fallout,” DeSantis said.
“I feel they have a responsibility to help the states weather through it, because I do think that they were responsible for some of this.”