Budget Watch JULY 2018 THE GENERAL APPROPRIATIONS ACT DOES NOT TELL THE WHOLE STORY OF STATE SPENDING The 2018 Legislature passed a $88.727 billion state budget the General Appropriations Act (GAA) which recently took effect on July 1. But that doesn t tell the whole story of what was spent by lawmakers last session. While the GAA price tag gets all the publicity, other appropriations can go largely unnoticed. This includes appropriations made in other bills or the back of the (GAA) bill, and appropriations for the prior fiscal year. All these appropriations are not included in the GAA total. The Legislature routinely makes supplemental appropriations in other substantive legislation, but it is usually a relatively small amount. The last three sessions have seen an escalation of these types of appropriations. After averaging $39 million per year from FY2007-08 to FY2014-15, the Legislature made appropriations in other bills totaling $131.4 million and $2.5 billion 1 in the next two sessions. The 2018 Legislature made $600.1 million in these supplemental appropriations. In addition, Section 99 in the GAA (in the back of the bill ) appropriated $50 million for 22 projects in five agencies that was contingent on the receipt of at least $50 million in reimbursement funds from the Federal Emergency Management Agency. The additional appropriations bring the total for FY2018-19 to $89.378 billion (before vetoes). In addition, the Legislature appropriated an additional $685.7 million in other legislation and the back of the bill for FY2017-18 (as opposed to the FY2018-19 budget year that is funded by the GAA.) This brings the total sending approved by the 2018 Legislature to $90.063 billion (before vetoes). Inclusion of the Governor s vetoes reduces total appropriations to $90.0 billion. While technically not appropriations, the Legislature also created two new sales tax contribution tax credits that will have the effect of providing at least $99 million in General Revenue (GR) annually for school choice scholarships (see HB 7055 below). 1 This includes $1.7 billion in spending authority for the Low-Income Pool that reimburses hospitals and other providers for uncompensated charity care. This program, for which continue funding was quite uncertain, received an extension from the federal government late in the session.
Appropriations Made By the 2018 Legislature FY 2018-19 Appropriations General Revenue Trust Funds Total General Appropriations Act (sections 1-7) 32,383,053,587 56,344,480,766 88,727,534,353 Back of the Bill 50,000,000 50,000,000 Less Failed Contingency (100,000) Total Budget 32,432,953,587 56,344,480,766 88,777,434,353 Appropriations in Substantive Bills SB 7026 - School Safety 400,000,000 400,000,000 SB 4 - Higher Education 1,736,404 121,776,631 123,513,035 HB 21 - Opioids 26,617,700 27,035,532 53,653,232 HB 7055 - K-12 Education* 13,850,000 13,850,000 HB 1091 - Early Learning 6,000,000 6,000,000 SB 1392 - Criminal Justice Data 1,750,000 1,750,000 HB 7087 - Taxation** 741,319 741,319 HB 1073 - Local Gov Financial Reporting 500,000 500,000 HB 937 - Perinatal Mental Health 125,920 125,920 Total Bills 444,821,343 155,312,163 600,133,506 Total FY 2018-19 Appropriations $32,877,774,930 $56,499,792,929 $89,377,567,859 FY 2017-18 Appropriations General Revenue Trust Funds Total GAA-Back of the Bill 264,306,564 411,756,931 676,063,495 Other Bills 8,940,429 650,000 9,590,429 Total FY 2017-18 Appropriations $273,246,993 $412,406,931 $685,653,924 Total Appropriations by the 2018 Legislature for FY 2017-18 and FY 2018-19 $33,151,021,923 $56,912,199,860 $90,063,221,783 Less Vetoes (29,214,922) (35,651,774) (64,866,696) Net Appropriations (FY 2017-18 & 2018-19) $33,121,807,001 $56,876,548,086 $89,998,355,087 * HB 7055 also appropriated $150,000 to the Dept. of revenue in FY 2017-18 to implement the Florida Sales Tax Credit Scholarship Program. ** HB 7087 also directs the Legislature to appropriated an unknown amount in FY 2019-20 to reimburse Monroe Co. and fiscally constrained counties for property tax revenue lost from hurricane tax relief provided by the 2018 Legislature. 2
APPROPRIATIONS MADE IN OTHER LEGISLATION FOR FY2018-19 School and Public Safety (SB 7026) - $400.0 million - This bill was the Legislature s response to the shooting tragedy at Marjory Stoneman Douglas High School and deals with mental health, firearm safety and school safety. The bill included changes to background checks, prohibiting people under 21 from buying a firearm, outlawing bump-fire stocks, attempting to keep firearms from those with mental illness, and numerous school safety provisions. The most controversial measure is the creation of a voluntary program that would allow some school personnel to carry firearms. Numerous attempts to ban assault weapons failed. The bill appropriated $400 million in General Revenue (GR)--$200 million is recurring- -for school hardening, safety, and mental health, the guardian program, and replacing the building at Douglas High. See all of the provisions of SB 7026 here. Florida Excellence in Higher Education Act (SB 4) $123.5 million In addition to making a number of changes to higher education, the bill made recurring appropriations of $121.8 million from the Educational Enhancement (Lottery) Trust Fund to expand the Bright Futures scholarships, $1.2 million in GR to expand the Benacquisto scholarships, and $500,000 to create the and Farmworker Student Scholarship Program. The bill: Reinstates full funding of the Bright Futures Florida Academic Scholar award at 100 percent of tuition and fees, plus $300 in fall and spring semesters to cover instructional materials and other costs, and guarantees funding for 2018 summer term; Reinstates funding for the Medallion Scholar award at 75 percent of tuition and fees for fall and spring semesters and guarantees funding for 2019 summer term; Expands Benacquisto Scholarship awards (full cost of attendance) to recruit out-of-state National Merit Scholar award winners; and Creates up to 50 scholarships annually for farmworkers and their children who are residents, have a 3.5 highs school GPA, have performed 30 hours of community service and has a 90 percent attendance record and no disciplinary action. Opioids (HB 21) $53.7 million Florida s opioid crisis was a lead issue last session. This bill strengthened laws governing opioids and appropriated $26.6 million in GR to the Department of Children & Families, the Department of Health and the State Court to: increase community-based treatment, outreach and recovery supports services; make emergency opioid antagonists available to first responders; provide medication-assisted treatment of substance abuse disorders in individuals involved in the criminal justice; and improve the Prescription Drug Monitoring Program. The bill also appropriated $27.0 million in federal funds to implement the State Targeted Response to the Opioid Crisis grant. Omnibus Education Bill (HB 7055) - $14.0 million - This is the controversial, major House education package contained a myriad of provisions including expanding school choice scholarship programs; streamlining accountability for participating private schools; providing flexibility to school districts; 3
modifying charter school requirements; requiring certain teachers unions to apply for recertification; and setting assessment, instructional, and curriculum requirements. The 207-page, 51-section bill appropriated: $2.0 million for the Department of Education (DOE) to implement the new Hope Scholarship Program which would allow a public school student who was bullied or otherwise mistreated to transfer to another public school or to receive a scholarship to attend a private school. A tax credit of up to $105 in sales taxes due at the time of purchase of a motor vehicle was created to fund the program for contributions to the program. While technically not an appropriation (and not counted as such in this report), this will have the effect of providing at least $41.2 million in GR annually to fund the scholarships. $950,000 to fund DOE s additional oversight requirements for school choice scholarship and program accountability. $10 million to create a reading scholarship program for struggling 3-5 graders (including $300,000 in administrative expenses for a scholarship funding organization to run the program); 250,000 for DOE to issue competitive grants for reporting on assessment data provided by participating private schools in the Florida Tax Credit Scholarship Program. $550,000 to fund instructional materials for home education students. $100,000 (non-recurring) for an independent third-party to investigate the cause of a school district financial emergency (budget deficit) and the district s response. The bill also created the Florida Sales Tax Credit Scholarship Program to help fund the Gardiner Scholarship Program and the Florida Tax Credit Scholarship Program. While technically not an appropriation, (and not counted as such in this report) this will have the effect of providing $57.5 million in GR annually to fund the scholarships. In addition, $150,000 was appropriated in FY 2017-18 for the Department of Revenue to implement the tax credit program. Early Learning (HB 1091) - $6.0 million This bill made changes to the School Readiness Program and appropriated $6.0 million in non-recurring trust fund dollars to implement the program assessment. Criminal Justice Data (SB 1392) - $1.75 million The bill appropriated $1.75 million in GR ($.67 million recurring) and nine positions to the Department of Law Enforcement (FDLE) to implement a model uniform criminal justice data collection system. It centralizes the majority of data to increase the collection and reporting of accurate data and promote transparency. It requires clerks of court, state attorneys, public defenders, county detention facility administrators, and the Department of Corrections to collect specified data and report it to the FDLE on a monthly basis. Changes include: creating a unique identifier to allow each person to be tracked throughout the criminal justice system; expanding reporting requirements for pretrial release programs to better analyze risk assessment tools; and requiring FDLE to publish more data and transition to incident-based crime reporting. Florida TaxWatch supported this legislation because we 4
conclude that an evidence-based decision process based on data collection can help assess effectiveness of the criminal justice system and programs that reduce recidivism and unnecessary incarceration. Taxation (HB 7087) - $1.1 million The tax cut package appropriated $91,319 to the Department of Revenue in FY 2018-19 for administrative costs to implement the tax changes and $650,000 million to reimburse fiscally constrained counties for revenue lots due to the property tax relief for citrus packaging and processing equipment damaged by Hurricane Irma. It also appropriated $313,886 in FY 2017-18 to DOR to implement the back-to-school and disaster relief sales tax holidays. In addition, the bill requires the Legislature to appropriate an unspecified amount in FY2019-20 to reimburse Monroe and fiscally constrained counties to revenue lost due to the abatement of taxes for residential improvements damaged or destroyed by Hurricanes Hermine, Matthew, or Irma. All of the money appropriated in HB 7087 is nonrecurring GR. Local Government Financial Reporting (HB 1073) - $500,000 These nonrecurring trust fund dollars were appropriated to the Department of Financial Services to competitively procure a contract for the enhancement of the Local Government Electronic Reporting System for state, county, municipal, and special district financial filings. Perinatal Mental Health Care (HB 937) - $125,920 This GR is appropriated to the Department of Health to provide perinatal mental health care information through the Family Health toll-free hotline. THE BACK OF THE BILL The publicized total for the new budget is the sum of the first seven sections of the GAA, which cover all the state agencies. Section 8 and following sections (this year it went to Section 101) are what is called the back of the bill. These sections include language implementing state employee salaries and benefits (as funded in sections 1-7), authorization for universities and colleges to spend non-state revenue on fixed capital outlay, trust fund sweeps, appropriations for the current fiscal year (at the time of session) and reversions and reappropriations. The majority of the sections are reversions of unspent appropriations made in prior years, sometimes from several years back. Most of these reversions are reappropriated for the same purpose, although some are appropriated for similar or even completely different uses. Reappropriations for the same purpose are not really new appropriations, but it could be argued that unspent funds reappropriated for other uses are. Regardless, these are not included in the budget total and they are not included in this report. There is often not a specified amount to be reappropriated, it is simply stated as the unexpended balance of funds from a previous appropriation. Although uncommon, appropriations for the new budget year can be made in the back of the bill. This year Section 99 appropriated $50 million for fixed capital outlay projects for various state agencies. The appropriation was contingent on the state receiving sufficient reimbursement from the federal government for hurricane recovery expenses. This $50 million is not included in the GAA total and is included in this report. 5
APPROPRIATIONS MADE FOR FY 2017-18 The Legislature also uses the back of the bill to appropriate funds for the current year (as opposed to the upcoming budget year that is funded by the GAA.) These are made to cover deficits in programs or for spending that must be made before the new budget takes effect on July 1. This year, there was $676.1 appropriated FY2017-18 in the back of the bill. These are also not included in the budget total. There were also appropriations for FY 2017-18 contained in other bills passed by the 2018 Legislature. Four claims bills compensating persons for negligence by state agencies appropriated a total of $9.1 million. The Department of Revenue received $313,886 to implement the back-to-school and disaster relief sales tax holidays and $150,000 to implement the new Florida Sales Tax Credit Scholarship Program. For much more information on the new budget, including all appropriations made for FY 2018-19, see Florida TaxWatch s recently released Taxpayers Budget Guide. 6
FY2017-18 Appropriations Made By the 2018 Legislature Back of the Bill (GAA) Agency General Revenue Trust Funds Total Deficits Education State School Trust Fund (for FEFP) 22,100,000 22,100,000 Health Care Admin Children's Medical Services 20,875,689 20,875,689 Health Care Admin Title XIX Medicaid 23,929,831 179,256,678 203,186,509 Children & Families Community Based Care Lead Agencies 20,000,000 20,000,000 Justice Administration Criminal Conflict & Civil Regional Counsels 1,720,000 1,720,000 Justice Administration Conflict Case and Due Process Payments 3,280,000 3,280,000 Other Education Gardiner Scholarship Program 900,000 900,000 Education Federal Grant 126,000,000 126,000,000 Health Care Admin KidCare - Hurricane Irma Impact 20,339 522,034 542,373 Fish & Wildlife Hurricane Irma Recovery 1,964,047 1,964,047 Multiple Agencies Hurricane Irma Response & Recovery 169,800,000 74,600,000 244,400,000 Persons w/ Disabilities Emerg. Generators - Dev Disabilty Centers 3,544,458 3,544,458 Children & Families Adoption Assistance Payments 3,396,552 3,396,552 Corrections Inmate Treatment - Hepatitus C 21,680,705 21,680,705 Business & Prof Reg Relocate Staff 118,600 118,600 Fish & Wildlife Vehicle Acquisition 324,646 324,646 Management Services First Responder Network 254,064 254,064 Management Services Housing Investigation Backlog 58,288 58,288 Management Services Law Enforcement Radio System Contract 1,717,564 1,717,564 Total $264,306,564 $411,756,931 $676,063,495 Other Legislation Health (HB 6501) Relief of C. Alvarez & G.Patnode 2,400,000 2,400,000 Health (HB 6505) Relief of Vonshelle Brothers 1,000,000 1,000,000 DCF (HB 6509) Relief of C.M.H. 5,076,543 5,076,543 DOT (HB 6535) Relief of Estate of Dr. Sherill Lynn Aversa 650,000 650,000 Revenue (HB 7055) Implement New Tax Credit Program 150,000 150,000 Revenue (HB 7087) Implement Sales Tax Holidays 313,886 313,886 Total $8,940,429 $650,000 $9,590,429 Total FY 2017-18 Appropriations $273,246,993 $412,406,931 $685,653,924 7
The monthly Budget Watch is written by Kurt Wenner, VP of Research Robert Weissert, Executive VP & Counsel to the President & CEO Chris Barry, Director of Communications & External Affairs David Mann Chairman of the Board of Trustees, Florida TaxWatch Dominic M. Calabro, President and CEO, Publisher & Editor Florida TaxWatch Research Institute, Inc. www.floridataxwatch.org Copyright Florida TaxWatch 8