New State Budget Goes Into Effect Today
A $66.5 billion budget largely propped up on stimulus dollars, a $1 cigarette tax increase and other increased fees goes into effect today, affecting the budgets of local governments, schools and other governmental entities.
But despite few cuts to major programs like education, some state officials and advocates are still concerned about what happens when the stimulus money runs out.
“We have to be planning for what we're going to do when the stimulus money runs out and how we're going to transition,” said university system Board of Governors Chair Sheila McDevitt at a meeting this past month in Orlando.
In addition to the stimulus, the budget also relies on the tobacco tax and several new fee increases. The $1 cigarette tax increase was a major issue of contention during the legislative session and it was unclear for a while whether it would pass. The governor also had originally objected to it and proponents feared it would fall victim to his veto pen.
However, Gov. Charlie Crist did eventually come around on the issue and signed the bill, saying the benefits outweighed the fiscal impact.
"Ronald Reagan used to say if you want to kill something tax it," Crist told reporters last month when he signed the budget. "Maybe it wouldn't be a bad idea to kill (smoking) and save lives."
The Legislature also moved to increase fees to avoid deeper budget cuts, and in some cases the increases are pretty hefty. Reinstating a suspended driver's license will increase, late payment fees on driver's license renewals go up 15-fold, from $1 to $15, and the cost of the original driver's license will go from $27 to $48. Renewing a driver's license goes from $20 to $48.
There are also 35 percent increases on all vehicle registration fees, and vehicle title fees more than double.
As a result of the stimulus money and fee increases lawmakers were able to avoid much of the pain that had been anticipated. When lawmakers had returned to Tallahassee in March, many feared a budget situation that involved catastrophic cuts to education and health care.
But the stimulus and fee increases are providing an influx of cash that allowed those programs to be held relatively harmless.
It largely kept money for education in tact, and managed a slight increase to the per student funding on the public school level. In higher education, the Legislature approved an 8 percent tuition increase and gave the universities the option to up the increase by another 7 percent. However, the popular Bright Futures scholarship took a beating and will no longer keep up with tuition rates.
Instead, it will give the state's highest achieving students a sum of money that will only cover a portion of the cost to attend a Florida university.
One of the last issues sewn up in May as budget negotiations came to a close was the decision about what to do with extra Medicaid money. The Low Income Pool had nearly $250 million more than originally planned for because of federal stimulus money. The House had wanted to set the money aside for the future and the Senate had pushed for spending it on low income health care now. In the end, they split it down the middle spending half this coming year and holding the other half in reserve.
The Legislature's economists will meet this summer to release new revenue estimates, which will determine whether the state has enough money coming in to cover the proposed budget. If the projections are below the anticipated income, the Legislature may have to come back for a special session to revise the budget.