Florida Senate President Jeff Atwater told his chamber's budget writers Wednesday not to raise taxes or fees during this election year to close a projected spending gap of up to $3.2 billion.
The potential deficit is the difference between anticipated revenue and the growing cost of meeting high-priority demands such as public schools and Medicaid, the state-federal program that provides health care to low-income citizens.
Lawmakers last year relied on $2.2 billion in fee and tax increases as well as spending cuts and federal stimulus dollars to balance a $66.5 billion budget, but Atwater told the Senate Ways and Means Committee that Floridians "do not have one more dime to send us."
"We will not extract one more dollar from the small business owner of this state or from any Floridian's wallet," said the North Palm Beach Republican, also a candidate for chief financial officer.
Ways and Means Chairman JD Alexander, R-Lake Wales, said the Legislature would have to cut or reorder spending by 3 or 4 percent to close the budget gap.
Atwater invited all 40 senators to the meeting that included reports on the status of Florida's economy.
Legislative economist Amy Baker said Florida will lag the rest of the nation in recovering from the Great Recession due largely to the state's housing surplus. She said unemployment, which hit 11.4 percent in November, likely will peak at 12 percent later this year.
Baker also had some advice for budget writers.
"Do nothing that adds any more houses to Florida's inventory until it can work itself down some," she said. "Be wary of anybody promising a panacea or quick fix because they do not exist."
Alexander said the budget gap is being driven mainly by growing Medicaid rolls and state employee retirement costs as well as a drop in property tax revenue that's a big part of the state public school financing system. Taxes collected at the local level are down due to declines in real estate values and the slowdown in new construction.
"We should be able to make it work, but we're going to have some serious decisions to work through," Alexander said.
He said lawmakers need to look hard at Medicaid to make sure money is spent efficiently and root out fraud and abuse that have plagued the program.
Education is the biggest part of the budget, but Alexander and Atwater said they'd prefer not to cut public school spending. Alexander said he couldn't make any promises but they'd "do everything we can to maintain the good work that's being done" particularly by community colleges.
Atwater said a push by business interests to increase state university spending, though, will be "very difficult to accomplish."
Atwater's declaration against tax and fee increases doesn't include university tuition. He said it's up to individual universities to decide whether to raise tuition under a law passed last year.
It lets each school raise tuition up to 15 percent a year, including any statewide increase passed by the Legislature, until reaching the national average. Florida's tuition rates remain among the nation's lowest although every university opted for the maximum increase last year.
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