On March 14, 2022, the Florida House of Representatives and Senate approved a $112 billion budget for fiscal year (FY) 2022-23, along with a $1.1 billion tax cut package. The budget also includes an additional $3.4 billion in federal American Rescue Plan Act (ARPA) state fiscal recovery aid, which Florida lawmakers allocated toward the end of the budget negotiation process. The Legislature relies heavily on federal aid to avoid major budget cuts in the upcoming fiscal year, with federal dollars making up about 35 percent of the entire budget. Furthermore, thanks to increased federal assistance in FY 2020-21 and FY 2021-22, Florida policymakers were able to both avoid deep budget cuts and save general revenue dollars: as of the beginning of the 2022 legislative session, policymakers had $7.3 billion in unallocated general revenue dollars. While federal assistance continues to play an important role in jumpstarting Florida’s economy in the short term and preserving the public services that families with low and moderate income rely upon, if state leaders do not act on long-term revenue raising strategies, lawmakers will be forced to either raise taxes on working Floridians who already shoulder the tax burden, or underfund crucial programs and services.
The Legislature relies heavily on federal aid to avoid major budget cuts in the upcoming fiscal year, with federal dollars making up about 35 percent of the entire budget.
Below, FPI highlights five key facts about the FY 2022-23 budget and tax legislation:
1. The tax package omits a massive, $3 billion tax cut that would have benefited the state’s wealthiest corporations.
In a win for Florida families and those who have been urging state leaders to reject additional corporate income tax (CIT) cuts, the Legislature did not include outsized corporate income tax breaks in the final tax package (CS/HB 7071). Significant CIT cuts first appeared in SB 1090 and made it through the Senate’s Finance and Tax Committee. If passed, SB 1090 would have cost Floridians approximately $3 billion over the next five fiscal years. The bill also included an additional cost of $624 million for CIT refunds scheduled to be disbursed in May 2022, due to previous automatic CIT downward adjustment and refund mechanism written into law.
Fortunately, SB 1090 did not pass. While the $624 million CIT refunds are still scheduled to go out in May 2022, policymakers can use the $3 billion that would have gone to corporations to invest in affordable housing, public schools, and other important programs and services.
2. The significant minimum wage increase for most state workers and some subcontracted providers included in the budget will help boost household income and jumpstart Florida’s economy.
During the 2021 legislative session, state leaders raised the minimum wage for most full-time state workers to $13 per hour, anticipating the phase-in of Amendment 2 (2020), which gradually increases the state minimum wage until it hits $15/per hour in 2026. This year, the Legislature kept its promise to speed up the timeline of minimum wage increases, bringing state workers and some subcontracted employees to $15 per hour well before Florida’s private businesses must comply with Amendment 2.
Specifically, the budget brings all “eligible” state employees and those in Other Personal Services to a $15 minimum wage on July 1. (See p. 464 of the General Appropriations Act for a list of eligible employees.)
This year, the Legislature kept its promise to speed up the timeline of minimum wage increases, bringing state workers and some subcontracted employees to $15 per hour well before Florida’s private businesses must comply with Amendment 2.
The budget also includes provisions that require contracted providers to bring certain employees to $15 per hour in 2022, including voluntary Pre-K (VPK) personnel, public school district employees, direct care staff working for Medicaid providers, some juvenile justice workers, and others .
3. The Legislature continues a much-needed investment in early learning.
Lawmakers recommend $30 million to expand eligibility for School Readiness to families earning up to 200 percent of the federal poverty level ($55,500 for a family of four).
While this requires a local match from early learning coalitions, it would continue increased flexibility for eligibility around access to child care in Florida.
Even before the pandemic, child care in Florida was on the edge. As noted in a recent FPI blog post, “The high cost for families, varying quality, razor thin margins that child care centers operate upon, and the low average pay for child care teachers had created a perfect storm of factors to hinder employment for parents and quality care for children.”
4. While the budget includes some funding to provide more Floridians with home- and community-based services (HCBS), tens of thousands remain on waitlists.
The final budget includes additional funding for the Agency for Persons with Disabilities (APD) HCBS waitlist that exceeds the sums proposed in either chamber's budget.
The Legislature appropriated $59.5 million in the final budget for this waitlist — the House had proposed $41.9 million and the Senate originally proposed no additional funding. The additional dollars are projected to take 1,120 individuals off the APD waitlist. However, as there are currently 22,759 people with disabilities waiting for services, this allocation would serve only 5 percent of the waitlist.
Additionally, the Legislature recommends $12 million for the Alzheimer's Disease Initiative, projected to serve about 1,000 more individuals, or 12 percent of the waitlist, and $9 million for the Community Care for the Elderly waitlist, projected to serve about about 990 more individuals, or 2 percent of the waitlist.
5. Lawmakers recommend a substantial increase in Department of Corrections (DOC) funding; however, the Legislature did not boost funding levels for critical education programming.
The Legislature appropriates $3.8 billion for DOC, which is a substantial increase over the current fiscal budget for the department, $2.89 billion. This significant increase has been assigned primarily to maintenance and repairs.
Basic education receives roughly the same level of funding as the current fiscal year. Given all the issues the department has had with idleness due to the lack of meaningful education programming, this allocation fell short in alleviating this issue.