2016-17 HHS Budget Is Best Viewed As a Series of Missed Opportunities

Unlike last year, the 2016 regular session of the Florida Legislature adjourned on time, with House and Senate agreeing on a budget for the upcoming year.

In 2015, the disagreement over whether or not to accept what would have been a 100 percent federally funded extension of health coverage to as many as 800,000 uninsured, very low-income Floridians pushed the 2015 session into overtime.  This year, however, Medicaid expansion and its potential benefit to Florida's businesses, families and taxpayers were barely discussed. Instead, House and Senate entered the budget negotiation process with similar proposals and the intent to avoid another impasse.

The result, the 2016–17 General Appropriations Act, includes some small but important efforts to address Floridians' unmet health care and human services (HHS) needs.  In the larger picture, however, the 2016–17 HHS budget is best viewed as a series of missed opportunities that will create additional unmet need, particularly given the record amount of available general revenue.

> Read the report.

Legislature Continues Disinvesting In Higher Education

The Florida Legislature's years-long policy of cutting state funding for higher education while shifting more of the cost of a college education to students and parents continues.

Budgets passed in the Senate and the House of Representatives again reduce state funding for universities and colleges by hundreds of millions of dollars after four years of deep cuts and despite rapidly increasing enrollment.

While philosophically opposed to raising taxes or fees, legislative leaders contemplate some increases in tuition. The final amount of tuition hikes - and the overall level of cuts in state dollars for higher education - will not be known until the two chambers agree on a budget and until Governor Rick Scott, who has said he opposes tuition increases, signs it.

Regardless of the depth of cuts in this session, the recent history of appropriations for Florida's 11 public universities and 28 state colleges (formerly known as community colleges) constitutes a record of disinvestment. Meanwhile, the Governor and legislative leaders trumpet college education as a key to a vibrant state economy and are asking universities to produce more graduates in science, technology, engineering, and mathematics.

> Read the report.

Collecting Sales Tax on Internet Purchases Makes Sense As Part of Tax Modernization

Overcoming the obstacles to collecting unpaid sales tax on Internet purchases and raising additional revenue makes sense, particularly as part of a comprehensive plan to modernize the state's tax system to make it fairer to average Floridians and local small business owners.

Requiring out-of-state retailers to collect the tax would level the playing field for Florida-based companies and strengthen the state's tax structure.  The national solution using a streamlined sales tax agreement among the states would provide the most comprehensive and legally defensible approach to the Internet tax issue.

But proposals that would offset additional revenues with reductions elsewhere would worsen existing flaws in Florida's tax system.  They would miss a large opportunity to make taxes more adequate to meet needs and would put more of the tax burden on average consumers.

> Read the report.

Budget Proposals Set Aside More Reserves Than Necessary

Governor Rick Scott and Senate and House leaders all plan to set aside far more money in reserves in the 2012-13 state budget than traditional financial practices require. The inflated reserve fund will force new cuts to health and human service programs and again shortchange public schools, state colleges, and universities.

That action, combined with their refusal to consider any tax modernization proposals that would generate new revenue, will produce another budget inadequate to meet the needs of the state. Meanwhile, no public discussion has occurred about how much money should be reserved and the impact of the level of reserves on appropriations for vital public services.

> Read the report.

Proposed Medicaid Cuts Will Harm Florida's Economy

The Governor's proposed 2012-13 budget calls for a $3 billion reduction in total appropriations.  Key to achieving a reduction of this magnitude is a cut of more than $2 billion to the perennially targeted Medicaid program.

But only about one-fifth of the funds "saved" would be state general revenue dollars.  In fact, the majority of the reduction ($1.2 billion) would be lost federal matching dollars.

The proposed cuts would be detrimental to both Florida and Floridians, undermining the already strained Medicaid system, imperiling access to care for the sickest, and siphoning off Florida's share of federal tax dollars out of the economy.

> Read the report.

Condition of Florida by the Numbers

When the 2012 legislative session opens Tuesday, the Governor and legislative majorities will begin action based on their perceptions about the needs of the state.

This report shows the reality of the condition of Florida by the numbers:  high poverty, high unemployment, a low percentage of the jobless receiving unemployment insurance benefits, income inequality, and an inadequate, unfair tax structure.

> Read the report.

Access to Care Plummeted In Medicaid Reform Experiment

Five years of Florida's controversial Medicaid Reform experiment in managed care are already in the books.  From the outset, permission to operate Reform was contingent upon the state's promise that access would be protected, as confirmed through ongoing analysis of patient-level "encounter data".  Yet that data and any meaningful programmatic analysis of it remain inexplicably unavailable.

But alternative sources of data corroborate the mounting anecdotal reports of problems with access in Reform.

In light of the vulnerability of Medicaid recipients and the barriers to access to care they face generally, these findings warrant suspension of efforts to expand and extend Florida's particular Medicaid managed care experiment to new areas and additional patient groups, pending further analysis.

>Read the report.

Large Florida Corporations Among “Tax Dodgers” in New Report

Eight large corporations headquartered in Florida paid less than 4 percent of their profits in state corporate income taxes over the last three years, according to a new study that shows that 265 Fortune 500 companies paid state taxes on only half of their profits.

These are among the findings in "Corporate Tax Dodging in the Fifty States, 2008-2010," released today by the Institute on Taxation and Economic Policy (ITEP) and Citizens for Tax Justice (CTJ) in conjunction with the Florida Center for Fiscal and Economic Policy.

Included are recommendations about how to minimize avoidance of Florida’s corporate income tax.

>Read the press release and the report.

Corporations: Masters or Servants?

“The role corporations play in American economics and politics is changing. Unfortunately, the changes are negative and pose serious threats to our society, our security, and our overall standard of living,” writes FCFEP Chair Nelson Easterling.

“There is clearly a growing schism between reality and the supporters of corporate power. Proponents of corporate power seem to think that the market and corporations are somehow better than real people.

“Every corporation is the creation of a government. Every corporation exists only because the people have authorized their representatives to define and delimit their existence. Corporations are, therefore, created to be the servants of the sovereign people, not their masters.”

> Read the Chair’s Perspective.

Reform Needed for Job Subsidies, Ensuring Big Business Pays Fair Share

Current laws and practices of Florida's economic development agencies prevent taxpayers and even the legislature from knowing whether the state gets its money's worth from job subsidies and tax breaks.

Economic development subsidies escape the kind of accountability that the legislature requires of public schools and social safety net programs. To establish accountability and transparency, the legislature could adopt reforms to increase confidence in the expenditure of limited tax dollars.

Furthermore, state laws that extend a variety of special tax benefits to some businesses, but not all, undermine the fairness of the state's tax structure. They also reduce revenue that could be used to meet critical needs like education and health care. Those defects could be remedied by adopting additional reforms recommended in this FCFEP report.

> Read the report.

State Provides Billions in Benefits to Business With Little Accountability

Florida provides more than $4 billion to business through the state budget and tax laws each year, with little or no examination or review.  Before even more breaks are enacted, as proposed by the governor and business organizations, the public interest would be served through an open, transparent assessment of current benefits.

Accountability is a mantra of state leaders when applied to teachers, whose salaries are now tied to students' test results, and public employees, whose names and salaries are available on the governor's website.  Yet no equivalent accountability mechanisms exist for the billions of tax dollars devoted each year to businesses.

Understanding current breaks given to business is necessary to determine whether corporations and other profitable businesses pay their fair share for the public infrastructure critical to ensuring that Florida is a good place to live and conduct business.

>Read the report.

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The Florida Center for Fiscal and Economic Policy
579 East Call Street
Tallahassee Florida 32301
Phone: 850-325-6480
Email: info@fcfep.org

The mission of the Florida Center for Fiscal and Economic Policy is to conduct independent research, develop new ideas, and advise policymakers on state fiscal and economic policy.  The Center pays particular attention to policy impacts on low- and moderate-income individuals, families and neighborhoods, workers, and small businesses.  The Center works to heighten public awareness of the need to adequately fund programs that improve opportunities, choices, quality of life outcomes, and the economic well-being of all Floridians.