Florida state budget
From Sunshine Review
Florida has a $66.5 billion state budget for FY 2009-2010, passed by the Florida State Legislature on May 8, 2009[1] and signed by Gov. Charlie Crist on May 27, 2009.[2] Gov. Crist line-item vetoed two provisions, a 2% pay cut on state workers and a transfer of $6 million from the concealed weapons trust fund.[3] The budget includes an increase in tobacco taxes ($1 per pack of cigarettes) and $900 million by expanding gambling.[4] $4.7 billion is from the American Recovery and Reinvestment Act (ARRA) of 2009.[5] Florida is estimated to reveive $12.2 billion from ARRA over 3 fiscal years.[6]
The 2009-2010 budget includes; $26 billion (39%) for Health/Human Services, $21.3 billion (32%) for Education, $9.3 billion (14%) for Natural Resources/Transportation/Economic Development, $5.2 billion (8%)Justice/Corrections, and $4.7 billion (7%) General Government.[7]
The Florida State Legislature had to meet in a special session in early January of 2009 before the regular session to close a $2.5 billion gap for 2008-2009 budget.[8] The Legislature reached a budget deal to close the then current budget year on January 11, 2009 with $1.2 billion in cuts and $1.6 billion in transfers and trims to leave a cusion of about $300 million going into the regular session.[9]
Florida's Director of the Office of Policy and Budget, Jerry L. McDaniel, sent out a memorandum on October 12, 2009 to the executives of state agencies advising them of an anticipated $2.6 billion shortfall for the upcoming 2010-2011 budget. While General Fund revenues expect limited growth, Medicaid and other expense increases will consume it.[10]
The 2010-2011 revenues for the General Fund will be the first fiscal year to see an increase, 6.8%, after 4 consecutive years of negative collections. 8.2% revenue growth is projected for 2011-2012 and 2012-2013.[11]
[edit] Budget Background
"The budget development process has three major phases: agency requests, Governor’s recommendations and legislative adoption. Following instructions issued jointly by the Governor’s Office and the Legislature in July, state agencies begin developing long-range program plans and budget requests which lay out the programs and funding needs of each agency for the next fiscal year. By mid-October, these requests are submitted to the Governor for consideration in the recommended budget. The Legislature convenes in its regular session beginning in March. The budget passed by the Legislature is valid for one year, beginning each July 1, and ending on June 30."[12]
The 2010 regular Legislative Session is scheduled March 2, to April 30, 2010.[13] Article III, section 3(d) of the Florida State Constitution stipulates regular sessions shall not exceed 60 consecutive days and special sessions 20 days.[14]
Florida does not have a personal income tax.[15] See Florida state budget (2008-2009) for more information.
[edit] Florida's Economy
According to data supplied by State of Florida, these are some of the major economic areas concentrated in the state.
- International Trade (40% of all U.S. exports to Latin and South America pass through Florida)
- Tourism - with 76.8 million visitors in 2004 (a record number), Florida is the top travel destination in the world. The tourism industry has an economic impact of $57 billion on Florida’s economy.
- Space Industry - The space industry represents $4.5 billion of the state's economy. The average annual wage of aerospace workers is approximately $52,000. The number employed at Kennedy Space Center (KSC) alone is 15,000 and Florida ranks 4th among the states in overall aerospace employment with 23,000 jobs.
- Agriculture – Florida leads the southeast in farm income. Florida produces about 75% of the U.S. oranges and accounts for about 40% of the world's orange juce supply.
- Construction - This industry's strength results from the steady stream of new residents and visitors who are welcomed to Florida each year.
- Services - growth in high tech, financial & back office operations
- Software - many small, entrepreneurial companies
- Health Technology (medical, biotech, laboratories)
- University Research - more than $500 million per year in sponsored research at Florida universities
- State Spending Per Capita 1998 - Florida Ranks 49th ($2,628)
The Tax Foundation declares that Florida's state and local tax burden has been among the nation's lowest. Estimated at 7.4% of income, Florida's state/local tax burden percentage is ranked 47th nationally, well below the national average of 9.7%. Floridians pay $3,441 per capita in state and local taxes.
- Florida's 2009 Business Tax Climate Ranks 5th
- Florida Levies No Individual Income Tax
- Florida's corporate tax structure consists of a flat rate of 5.5 percent on all corporate income, which ranks 40th highest among states that tax corporate income. In 2006, state-level corporate tax collections (excluding local taxes) were $132.99 per capita and ranked 31st highest nationally.
[edit] Accounting Principles
David W. Martin is Florida's Auditor General. the Auditor General is a constitutional officer appointed by the Joint Legislative Auditing Committee. His appointment is confirmed by both houses of the Legislature. The department's audit reports are available online.[16]
Florida combined the offices of the State Treasurer and State Comptroller into the position of Chief Financial Officer after voters passed a consitutional amendment in November of 1998. Florida's Chief Financial Officer is Alex Sink, elected in 2006. The Chief Financial Officer oversees the Department of Financial Services. The Florida Legislature in 2002 merged the state Department of Insurance, Treasury and State Fire Marshal and the Department of Banking and Finance into the Department of Financial Services.[17]
| Credit Rating | Fitch | Moody's | S&P |
| Florida[18] | AA+ | Aa1 | AAA |
The Institute for Truth in Accounting (IFTA) rates Florida “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Florida’s CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[19] Florida's Department of Financial Services is responsible for filing the CAFR.[20]
[edit] Accounting transparency checklist
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[edit] The good
- The website has Comprehensive Annual Financial Report (CAFR) dating back to 2002.[21]
- An independent auditor’s report is published on page 10 of the document.[22]
- It provides supplements to the budget workup, such as notes, starting on page 50 of the document.
- The budget is posted using organized and consistent methods of financial reporting.
- Florida law requires a balanced budget and prohibits a deficit at the end of the year to be carried over to the following year.
- It includes all costs incurred by the government, including future liabilities, starting on page 110 of the document.
- The CAFR compares estimated and actual budgetary numbers, such as on page 130 of the document.
[edit] The bad
- The Florida office was not precisely timely in submitting the budget.
- The CAFR is posted in PDF format, so it’s not searchable online.
[edit] Budget Status, 2008-2009
As early as November of 2006, Florida had the second most foreclosures in the country with 95,862 homes foreclosed upon in just the third quarter of that year. [23] In November of 2007, Florida's government began withdrawing money from a multi-billion dollar investment pool that funded local cities and school districts over concerns of investments linked to subprime mortgages. [24] In 2007, Florida also began cutting spending in an effort to balance the budget. [25] A year later, in December of 2008, Florida only trailed Arizona in the number of foreclosures, and it implemented a voluntary, 45 day moratorium on home foreclosures. [26] Although this led to a 20% decline in foreclosures for January, 2009, the Florida foreclosure rate remains 1 in 214 homes. [26] The collapse of the housing sector is a major concern, particularly since it is predicted to continue on its downward spiral until 2010-2011. [27]
In addition to the far-reaching effects of the mortgage crisis, Florida faces long-term budget problems as a result of a decline in its major economic engines -- building, migration and tourism, which have all declined. State revenue has declined for three years in a row, and the new fiscal year beginning July 1, 2009, could be the fourth. [25] With the fall in property taxes, school districts remain underfunded. [25] Also, since Florida does not have an income tax, it relies heavily on sales tax, corporate tax and real estate transaction taxes, which have all declined. [25]
The following table provides a glimpse into state expenditures and gross domestic product from 2000 to the present.
| Fiscal Year | General Funds Expenditures | Gross Domestic Product (Millions) |
|---|---|---|
| 2001 | $91,800 [28] | $497,423 [29] |
| 2002 | $99,300 [28] | $522,719 [29] |
| 2003 | $107,400 [28] | $559,021 [29] |
| 2004 | $115,500 [28] | $607,284 [29] |
| 2005 | $130,900 [28] | $670,237 [29] |
| 2006 | $140,500 [28] | $716,505 [29] |
| 2007 | $150,900 [28] | $734,519 [29] |
| 2008 | $162,200 [28] | $753,000 [28] |
[edit] The 2008 Deficit-Elimination Package
On January 14, 2009, the Florida legislature passed a deficit-elimination package, in an effort to close the budget shortfall for 2008. [30] The plan included:
- increases in traffic fines of $10 for every traffic ticket issued except for speeding tickets which went up by $25 and an elimination of an 18% discount on tickets for those enrolled in driver's improvement courses; [30]
- a suspension in the environmental land program saving $4 million and cancelling $250 million in bond sales; [30]
- a 10.5% cut in Medicaid payments to nursing homes and a tax increase on nursing homes; [30]
- a transfer of $400 million from a Rainy Day Fund, leaving about $250 million in the fund; [30]
- a $466 million cut in education spending, an option for school administrators to volunteer for pay cuts and limiting the severance of teachers and administrators to one year; [30]
- a 2% decrease in teacher's bonuses, saving the state $11 million; [30]
- a 4% cut in aid to state universities and community colleges for a savings of $157 million; [30]
- $700 million to be borrowed from a $1.2 billion endowment that invests money from tobbacco settlements for future use on healthcare programs; [30]
- a $9.9 million cut in the state's public/private tourism agency, Visit Florida; [30]
- a 5% cut in a program that helps people with developmental disabilities, including autism; [30]
- an $190 million cut in a program that helps pay for low and moderate-income housing; [30]
- an elimination of 1,400 state jobs [30]; and
- a $3.75 million decrease in funding for cancer, cardiovascular, stroke and pulmonary diseases[30].
[edit] Stimulus Funds
In February of 2009, Governor Crist requested $2.3 billion in funds from the federal government. [31] Governor Crist stated, "I'm not a big-government fan, but there are times when government needs to help." [31] With President Obama's signing of the stimulus bill on February 17, 2009, Florida now expects to receive $12 billion in federal funds. [25] Governor Crist believes that the federal funds will be enough to avoid further spending cuts if the legislature approves an agreement allowing Seminole Indians to expand gambling at tribal casinos in exchange for paying the state millions of dollars per year for the freedom to do so. [25]
Of the $12 billion, Florida may not be eligible for $3.5 billion because of a requirement that states that accept stimulus money should not lower education spending below 2006 levels. [32] Florida has asked Secretary of Education Arne Duncan for a waiver so that they may receive the full $12 billion. [32] [33]
On March 8, 2009, The Miami Herald reported that the state is considering borrowing against the Florida Prepaid College Board, a fund into which parents pay in order to lock in tuition rates for their children's future college tuition. [34] Some believe that because the fund is guaranteed by the state, the state should be able to borrow against the $8.8 billion fund. [34] Others disagree arguing that the state does not have the right to borrow against the fund and further, that this is another example of "lawmakers pillaging savings accounts and special funds". [34]
[edit] State budget websites and analysis
Florida currently has some level of transparency, including "Florida's Checkbook", an online spending database created by the state's Chief Financial Officer, Alex Sink.
Certain public agencies have failed to comply with open records laws.[35]
[edit] Website evaluation
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MyFlorida.com is the website for the state of Florida.
- Main article: Evaluation of state websites
[edit] The good
- State tax information is provided.[36]
- Full list of current contracts are provided.[37]
- Ethics commission information provided.[38]
- Annual financial audits are published.[39]
- Elected and administrative officials are listed with contact information under respective departments.[40]
- Provides database of registered lobbyists.[41]
[edit] The bad
- Site has a search function, but is somewhat difficult to navigate.
- Budget documents available, full budget does not appear to be online.[42]
- Does not provide information on state-paid lobbying and agency lobbying contracts.
- Search provides a number of departments that provide information on making public records requests, but there isn't comprehensive information.[43]
[edit] Economic Stimulus Transparency
- The American Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.[44]
- It is estimated that Florida will receive at least $7.7 billion in federal funding.[45]
- The economic recovery website for Florida is available here.
[edit] Error in ARRP
On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.[46][47]
According to the ARRP website, the stimulus package "created or saved" more than 100 jobs in 6 Florida Districts that do not exist.[48]
[edit] Legislation
Florida Senate Bill 1796 "Directs the Legislative Auditing Committee to provide oversight and management of a state website providing information on governmental appropriations and expenditures" and "Requires the Executive Office of the Governor to establish a website providing information relating to each appropriation in the General Appropriations."[49] SB 1796 was signed by Governor Crist on May 27, 2009.[50]
[edit] Government tools
The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database.
| State Database | Searchability | Grants | Contracts | Line Item Expenditures | Dept/Agency Budgets | Public Employee Salary |
|---|---|---|---|---|---|---|
| Florida's Checkbook |  |  | | | | |
[edit] Limitations and Suggestions
Florida's Checkbook should post employee salaries just as other state transparency sites (such as the Missouri Accountability Portal) do.
[edit] Support for creation of the database
The National Taxpayers Union urged Representatives to support House Bill 181, which would have created a spending transparency database.[51]
Americans for Tax Reform also urged for transparency,[52] and made a statement to the Florida Finance and Tax Committee.[53]
[edit] Public employee salary information
The Bay Tax Foundation requested the names of the "renewed members of the pension fund from Bay County, the agency they work for, their salary in 06-07, the date they retired and their retirement benefit collected." Some of this information has been made available under "links" on this page.
[edit] See also
[edit] External links
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
- James Madison Institute
- Tax Foundation website
- Bay Tax Foundation
- Florida Legislature
- Florida Office of Policy and Budget
- Florida Government spending
[edit] Additional reading
[edit] References
- ↑ The Miami Herald, "House passes budget 75-43, sine die to come," May 8, 2009
- ↑ Gov. Crist Press Release, "Governor Crist Signs 2009-2010 Budget to Maintain Investments in Florida's Future," May 27, 2009
- ↑ Gov. Crist, "Veto Message," May 27, 2009
- ↑ The Miami Herald, "Crist signs budget but restores pay to state workers," May 27, 2009
- ↑ Foley & Lardner LLP, "Florida Government and Politics Weekly Update," February 23, 2009
- ↑ Gov. Crist Web site, "The People's Budget," retrieved October 14, 2009
- ↑ Florida Department of Education, "2009-2010 Education Budget," May 19, 2009
- ↑ Gov. Crist", "The Crist / Kottkamp Administration Fiscal Year 2009-10 Budget Recommendations," retrived October 14, 2009
- ↑ The Miami Herald, "Budget deal done with $2.8b plan. Session to end Weds," January 11, 2009
- ↑ Jerry L. McDaniel, Director Office of Policy & Budget Memorandum, “FY 2010-2011 Legislative Budget Requests,” October 12, 2009
- ↑ Legislative Budget Commission, "Long-Range Financial Outlook Fiscal Year 2010-11 through 2012-13," September 15, 2009
- ↑ Gov. Crist, "Budget Process Overview," retrieved October 14, 2009
- ↑ Florida State Legislature, 2010 Session Dates," retrieved October 14, 2009
- ↑ Online Sunshine, "Florida State Constitution," retrieved October 14, 2009
- ↑ State of Florida.com, retrieved October 14, 2009
- ↑ Florida Auditor General Web site, retrieved October 14, 2009
- ↑ Florida Department of Financial Services Web site, retrieved October 14, 2009
- ↑ California State Treasurer, “Comparison of Other States’ General Obligation Bond Ratings”
- ↑ Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
- ↑ Florida Department of Financial Services Web site, retrieved October 14, 2009
- ↑ State financial reports
- ↑ 2008 CAFR
- ↑ Foreclosurelistings.com, Florida Ranks Second Among States with Most Foreclosures, November 13, 2006
- ↑ New York Times, Fund Crisis in Florida Worrisome to States, December 5, 2007
- ↑ 25.0 25.1 25.2 25.3 25.4 25.5 MSNBC, More spending cuts likely for Florida budget, February 18, 2009
- ↑ 26.0 26.1 Tampa Bay's 10 Connects.com, 1 in 214 Florida Homes in Foreclosure, February 12, 2009
- ↑ Builder Online, South Florida's housing market recovery won't be anytime soon in Miami Dade county
- ↑ 28.0 28.1 28.2 28.3 28.4 28.5 28.6 28.7 28.8 US Government Spending, Florida State and Local Spending, 1992-2010
- ↑ 29.0 29.1 29.2 29.3 29.4 29.5 29.6 Iowa Workforce, Florida
- ↑ 30.00 30.01 30.02 30.03 30.04 30.05 30.06 30.07 30.08 30.09 30.10 30.11 30.12 30.13 MSN Money, Florida's $2.88 deficit-elimination plan at a glance, January 14, 2009
- ↑ 31.0 31.1 The Voyager, College Media Network, State budget cuts continue, January 29, 2009
- ↑ 32.0 32.1 The Ledger, Schools Will Get Help, but Not Across the Board, February 17, 2009
- ↑ Wakulla County Real Estate, "Senate Budget Panel Questions Whether Crist Budget Plan is Feasible", March 9, 2009
- ↑ 34.0 34.1 34.2 The Miami Herald, State weighs tapping into prepaid tuition fund for economic relief", March 8, 2009
- ↑ Sun Sentinel, "Many Florida public agencies flunk simple open records test," November 28, 2008
- ↑ Taxes
- ↑ State Contracts
- ↑ Ethics Commission
- ↑ CAFR
- ↑ Agency Directory
- ↑ Lobbying
- ↑ Budget
- ↑ Search "Public records request"
- ↑ National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- ↑ Wall Street Journal, "Stimulus Spending by State"
- ↑ $6.4 Billion Stimulus goes to Phantom Districts, Watchdog.org, November 17, 2009
- ↑ Stimulus Creates Jobs in Non-Existent Congressional Districts, Watchdog.org, November 16, 2009
- ↑ Florida, Watchdog.org, November 17, 2009
- ↑ Florida Senate, "Senate 1796: Relating to Governmental Financial Information," Accessed June 16, 2009
- ↑ Office of the Governor, "Governor Crist's Bill Actions Today," May 27, 2009
- ↑ National Taxpayers Union, "An Open Letter to the Florida House of Representatives: Taxpayers Support Online Spending Transparency (HB 181)," March 14, 2008
- ↑ Americans for Tax Reform, "Letter," March 26, 2008"
- ↑ Americans for Tax Reform, "Transparency in Government Spending – A Way for Florida to Lead the Nation," February 21, 2008
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