December 21, 2021

Between the Lines: Top 5 Things to Know About the Governor’s Budget

Governor Ron DeSantis recently unveiled his $99.7 billion budget proposal for the upcoming fiscal year, a 2 percent decrease from Florida’s current-year budget.

While the governor’s recommendations for fiscal year 2022-23 include important investments in environmental conservation and K-12 education, the proposal is predicated on low taxes for wealthy residents and corporations. Federal dollars have played a major part in bolstering Florida’s budget over the past two fiscal years and have allowed state leaders to avoid making deep cuts to crucial program and services; however, the cost of allowing the richest Floridians to avoid paying what they owe in taxes is underinvestment in public services in the long term.  In fact, Florida ranks 46th, behind 44 other states and the District of Columbia, on per capita funding for state and local public services. This is particularly concerning given the nascent economic recovery and increased demand for programs and services that help families put food on the table.

Below, Florida Policy Institute staff highlights five key facts about the governor’s budget proposal.

  1. The gas tax holiday would be ineffective in providing real relief to Floridians struggling to make ends meet. The proposed $1.1 billion temporary cut to the state gas tax, paid for with American Rescue Plan Act dollars,  is not the long-term, targeted tax relief needed to boost income for Floridians living off of low and moderate wages, nor would it fix the state’s upside down tax code, which requires those being paid poverty-level wages to contribute a greater share of their household income to taxes than millionaires. There are better ways to provide long-term tax relief, including enacting a Working Floridians Tax Rebate (WFTR) pegged at 20 percent of the federal Earned Income Tax Credit. The WFTR would inject hundreds of millions of dollars into local economies and provide an average $500 annual rebate to Floridians with low-to-moderate incomes.
  1. The proposed increases in K-12 funding and teacher pay are crucial investments; however, additional funding is needed to improve the state’s per-pupil investment and veteran teacher salaries. The additional investment included in the proposal would bring average per pupil spending to $8,000, a much-needed step in the right direction. However, in the latest National Education Association (NEA) state rankings for per pupil expenditures, Florida ranked 43rd. Also, the number of students has increased by over 4.1 percent, which means a greater demand for resources. This is particularly important as some of these students may be those who went “missing” during the COVID-19 crisis and need extra support to catch up to their respective grade levels. The governors’ recommended budget also includes a $600 million allocation, an increase of $50 million, for boosting new teachers’ starting salaries, as well as retention bonuses of $1,000 for veteran teachers and other instructors. As noted in a recent FPI blog post, however, Florida’s average teacher pay has actually dropped in the NEA rankings over the past few years, falling to 49th in the nation. At the same time, Florida is in the middle of a critical teacher shortage: an October report by the Florida Education Association found that there are over 9,000 staff vacancies statewide. Clearly, a greater investment in veteran teacher pay is needed to keep Florida competitive with other states and retain qualified educators.
  1. While the budget proposal includes increases in funding for the Department of Corrections, it does not provide fixes for the department’s long-standing fiscal problems. The governor’s budget proposal includes an important $20 million increase in funding for meaningful programming, such as basic education and vocational teachers, for people who are incarcerated. Also, it provides $15.9 million to improve retention of correctional officers.  However, the budget does not recommend long-term fixes to the Department of Corrections’ budget crisis. DOC’s secretary warned the Legislature that the department is in “crisis” despite having recorded the lowest incarcerated population in 15 years. While these increases are a step in the right direction, they still fall short of adequately funding critical rehabilitative programs. For example, in 2020, on average, only 4 percent out of the 66 percent of incarcerated who needed general education were enrolled in a class.
  1. The governor’s budget fully funds the Sadowski Housing Trust Fund; however this is according to the reduced funding formula passed during the 2021 legislative session. The governor’s budget includes $355 million for the Sadowski Housing Trust Fund, which is funded through collections from the documentary stamp tax. After nearly two decades of “sweeping” the trust fund—diverting funds meant for affordable housing to fund other parts of the state budget—the Legislature passed SB 2512, which essentially enacted a permanent sweep. It reduced the documentary stamp tax collection earmarked for affordable housing from 24 cents per dollar to 9.7 cents per dollar. It also protected the Sadowski fund from future funding sweeps. While the governor’s budget does include full funding for Sadowski, it is important to keep in mind that the “full funding” amount is based on this significantly reduced funding formula.
  2. First responders and teachers would receive well-deserved bonuses under the proposed budget. Child care teachers should have also been included. The governor’s proposal includes bonuses for several occupations deemed “essential” during the pandemic. However, child care workers and early childhood educators, a crucial part of the essential workforce necessary to return Florida’s economy to full function, were left out. These employees are not eligible to receive bonuses in the proposal unless they are school district staff, who comprise  a small fraction of the state’s child care workforce. Florida’s child care workers and early childhood educators are already paid lower wages than their K-12 counterparts and at $10.87 their median hourly pay is below the national average and well below a living wage. These essential workers should be among those slated for bonuses in the proposed budget.

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