Governor Ron DeSantis released his fiscal year (FY) 2021-22 budget proposal on January 28, 2021. The request totals $96.6 billion, a 4.7 percent increase over the $92.2 billion current year budget.* Overall, the governor’s proposal reflects ongoing support for areas such as teacher raises, conservation, and affordable housing. However, more than half of the proposed increase in the governor’s budget is due to increased federal funds, in the form of COVID-19 relief and education funding. While these important measures at the federal level have helped stave off significant funding cuts in the governor’s proposal, they are not long-term solutions to Florida’s history of under-funding public services and inadequate tax system.
Introduction: COVID-19 Drives Budget Priorities
In the 11 months since the outbreak of COVID-19 in Florida, nearly every aspect of people’s lives has been overshadowed by the pandemic. Floridians have faced unprecedented challenges, from social distancing and remote learning, to skyrocketing unemployment, hunger, and homelessness. In the public dialogue, lawmakers at all levels grapple with the economic fallout and public health emergency. Florida’s economy, dependent on consumer spending, tourism, and service jobs, has been hit hard and state revenue took a dive.
As lawmakers were wrapping up the 2020 legislative session last March, legislators took some steps toward addressing the state’s impending budget shortfall, primarily by scaling back tax cuts. At the same time, Congress was well on its way to passing the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which would send billions of federal dollars to state and local governments to assist with the public health and economic impacts of the pandemic.
In the months since, Governor DeSantis has not addressed the state’s declining revenue and impending budget shortfall – nor was there much transparency in how Florida’s $8.3 billion share of CARES Act dollars were spent. The governor’s FY 2021-22 recommended budget provides insight into how the administration proposes to balance the state’s budget. Although the proposed budget increases spending during a recession, it is critical to note that more than half of the recommended budget increase comes from federal dollars. Without federal aid, Florida would be at the edge of a fiscal cliff.
Furthermore, though the proposed budget leverages federal funds for an overall budget increase, the administration misses the opportunity to change course on Florida’s long history of under-investing in public services and perpetuating structural inequities through the tax system. Governor DeSantis reiterates on the budget website his commitment to low taxes, despite the fact that Florida remains a high tax state for families with low- and moderate-income. The true cost maintaining this status quo is high quality education, affordable health care, a strong safety net, sustainable growth, and an adequate and equitable tax code.
Florida Policy Institute’s (FPI’s) “Roadmap to Shared Prosperity in Florida” is a blueprint for improving economic mobility, health, and fiscal stability for families in the Sunshine State, principles that are important now more than ever. This includes:
- Fostering community well-being by investing in education and health;
- Spurring sustainable growth by promoting equitable economic development, investing in smart infrastructure, and improving climate resilience;
- Advancing shared prosperity by nurturing inclusive communities and building a strong safety net; and
- Cleaning up and modernizing the tax code for a stronger future.
COVID-19 has laid bare the deep inequities at the core of Florida’s economy. The state must pursue policies, including both preserving investments and raising revenue, to ensure not only a recovery from this recession, but also a stronger, more equitable economic foundation for the state’s future.
*Florida Policy Institute defines current year funding in this report as FY 2020-21 appropriations, plus vetoes. Except for Figure 1, FPI does not include adjustments and supplemental funding in calculations of current year funding levels.