February 2, 2024

State of the Budget (Part 3): Florida Leaves Federal Dollars on the Table

This blog post was originally published on Jan. 26, 2024. It was last updated on Feb. 2, 2024.

The 2024 Florida legislative session commenced on January 9, and as mandated by the state constitution, policymakers will have to pass a balanced budget for the upcoming fiscal year (FY) 2024-25.

To do so, policymakers will consider a number of factors, including the state's economic outlook and revenue projections, the governor’s budget and tax proposal,  and the cost of bills that are passed during the session.

Beyond the dollars and cents involved in developing the state budget, it is important to note that a state budget is as much an accounting document as it is a statement on the Legislature’s values and policy priorities. Spending is not inherently “good” nor “bad”; instead, each appropriation represents a choice that is made about how, where, and why lawmakers invest shared resources.

Similarly, choices about how to raise revenue are not merely about the dollars that will end up in state coffers. Florida’s budget is supported by revenue generated by the state and drawn down from the federal government. How revenue is generated, where it comes from, and how it is utilized also indicates the values and priorities of state leadership.

In this three-part series, "State of the Budget: Top Fiscal Considerations for Florida’s Upcoming Fiscal Year," FPI examines key fiscal and policy considerations for lawmakers as they convene for the 2024 legislative session. Part 1 looks at the outlook for state revenue sources; Part 2 examines the costs associated with key policy proposals; and in Part 3, FPI provides an overview of federal funds that Florida has opted out of.

Home Energy Rebate Programs

The governor’s recommendation includes $1.7 million for the Florida Department of Commerce to administer the home energy rebate programs authorized by the Inflation Reduction Act. However, in the current year budget, the governor vetoed $30 million that would have allowed the state to tap into $346 million in federal funds for the rebate programs to help households with low income save on electricity bills and upgrade homes with clean energy equipment. While the governor may be trying to reclaim some of the $346 million in federal funds the state rejected in FY 2023-2024, it is unclear how much federal money would flow to the state if policymakers adopt the proposal. It is important to note that Florida is still eligible to receive the $346 million if the state notifies the U.S. Department of Energy of plans to apply for the funds by August of 2024.

Solar for All Program and Climate Pollution Reduction Grants

Last year, Florida did not apply to receive funds from the $7 billion “Solar for All” program authorized by the Inflation Reduction Act. The program aims to “expand the number of low-income and disadvantaged communities primed for residential solar investment” by enabling households to access residential solar energy opportunities. The U.S. Environmental Protection Agency (EPA) is not offering application extensions and, for this reason, Florida will not be able to access the funds. Moreover, the governor’s recommendation does not include plans to enable households with low- to moderate-income to access solar energy. 

Relatedly, Florida declined $3 million from EPA’s “Climate Pollution Reduction Grants” program to develop plans to reduce climate and local pollution, which would have made the state eligible to receive federal funds to implement the plans. While the governor’s recommendation includes funding for Everglades restoration, water quality improvement projects, protecting conservation lands and waterways, and mitigating and restoring contaminated sites, it is unclear why the state would reject federal funds to enhance the state’s pollution reduction efforts.

Summer EBT

The Summer Electronic Benefit Transfer Programs for Children (Summer EBT) is a new type of federal food assistance that offers pre-loaded cards to help parents with low income afford groceries during June, July, and August. Beginning in the summer of 2024, eligible families in states and territories that participate in the program will receive $40 per month for every child in the household. The deadline for states to opt into the program was January 1, 2024. Unfortunately, Florida did not apply for the Summer EBT program, effectively turning down $260 million in nutrition aid that would serve around 2.2 million children. Although the governor’s recommendation does not include plans to participate in the program, policymakers could include a budget item to cover the administrative costs for the state to apply and participate in the Summer EBT Program in 2025. 

Medicaid Expansion

Florida is one of 10 states that have not expanded Medicaid coverage as allowed under the Affordable Care Act. A recent analysis by the Center on Budget and Policy Priorities estimates that Medicaid expansion in Florida would generate an additional $5 billion per year in federal funding from a 90 percent enhanced federal match for Medicaid if the state had chosen to adopt the measure in 2023. Florida Policy Institute estimates that expanding Medicaid would save the state about $200 million annually, and would benefit more than 726,000 uninsured adult Floridians. If the state expands, it would also receive $2.8 billion in incentive funding from the American Rescue Plan Act over the first two years. Neither the governor’s budget proposal nor the Senate’s “Live Healthy” proposal include funding for Medicaid expansion. In the Florida House, however, Medicaid expansion has at least received some bipartisan support.

Mental Health Mobile Response Teams

Mobile response teams (MRTs) provide 24/7 on-demand behavioral crisis intervention services in any setting, including homes, schools, and emergency departments. The Marjorie Stoneman Douglas High School Public Safety Act of 2018 established an $18.3 million recurring appropriation to the Department of Children and Families (DCF) to fund MRTs, as well as additional funds for the Mental Health Assistance Allocation through the Department of Education (DOE) that can be used at the discretion of school districts to further support MRTs. The American Rescue Plan Act (ARPA), enacted on March 11, 2021, established a new state Medicaid option to provide MRT services for a five-year period beginning in April 2022. States opting in will receive an enhanced federal match of 85 percent for qualifying services for the first three years of coverage. After three years, Florida would draw down the regular 61 percent federal match for MRT services it currently collects for other Medicaid covered services. 

The Florida Senate included $11.5 million in recurring general revenue for MRTs in the Live Healthy Act (CS/SB 7016). This significant health legislation also includes language to instruct the Agency for Health Care Administration (AHCA) to apply for the enhanced reimbursement offered in ARPA for MRTs, which could draw down up to $9.7 million in funding for CS/SB 7016’s MRT appropriation, and even more if school districts and local municipalities participate with their MRT programs. The House’s companion bill, HB 1549, mirrors the Senate’s funding levels and includes the ARPA funding provision.

Carbon Reduction Program

Part of the 2021 Infrastructure Investment and Jobs Act was the creation of the Carbon Reduction Program, which authorized $6.4 billion in funding for states and localities over five years to develop strategies to reduce carbon emissions from transportation. Florida’s allocation under this program was $320 million, the third largest allocation following Texas and California. States had until November 15, 2023, to submit their Carbon Reduction Strategies, and Florida’s Department of Transportation (DOT) had begun working on a plan in coordination with the state’s 27 metropolitan planning organizations. However, in an apparent turn of events, DOT Secretary Jared Perdue notified the U.S. Department of Transportation that Florida would be withdrawing from the program just before the submission deadline. Florida is now the only state in the nation that is not participating in the Carbon Reduction Program or receiving any of its funds.

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