SCOTT: SLASH HOSPITALS, BOOST SCHOOLS

By BRANDON LARRABEE
THE NEWS SERVICE OF FLORIDA

THE CAPITAL, TALLAHASSEE, December 7, 2011......Gov. Rick Scott unveiled a budget plan Wednesday partially paying for a boost in education spending with deep cuts to hospital payments, drawing scoffs from the state's main teachers union and howls of protest from hospital groups.

Scott's plans would also trim business taxes, shutter some prisons and shrink the state workforce by about 4,500 positions.

But what drew the most attention was Scott's proposal to plow $1 billion into public education, in marked contrast to his reputation last year as a skinflint governor who balanced the budget with across-the-board spending reductions. Scott and his supporters touted it as a reaction to his meetings with Floridians during his summer travels; Democrats saw it as a crass political maneuver by an unpopular governor ahead of an election year.

Whatever the motivation, Scott said he would not bend.

"I will not sign a budget from the Legislature that does not significantly increase state funding for education," he vowed.

The increase would be offset by several factors. About $444 million would replace one-time state funding or the loss of local tax income, and another $190 million would pay for enrollment growth. The per-student increase would be about $142, or 2.3 percent. Scott also didn't replace hundreds of millions of dollars in federal education funding meant to fill some shortfalls.

Andy Ford, president of the Florida Education Association, downplayed Scott's education spending as an attempt to distract from the cuts of recent years. The state would still spend about $210 million less on education under Scott's plan than it did five years ago, with overall education funding down about $1.6 billion.

"Today’s budget proposal seeks to put a smiley face on the massive budget cuts of the past few years and ignores the realities that our children aren’t getting the education they need," Ford said. "The governor says he wants to create high-paying jobs for Florida by investing in public education, but this budget proposal puts little more than a Band-Aid on the massive cuts of the past few years."

Scott's plan would also slash Medicaid reimbursement rates for hospitals, part of a plan to reduce by $2.1 billion the expected spending for the program next year. The governor said he would accomplish that largely by paying the same rates for similar hospitals, which would be placed into 10 groups to determine payment rates according to the type of facility.

"Our current system of reimbursing Medicaid hospital providers is unfair, illogical and incredibly expensive for Florida families and businesses," Scott said at a press conference that was at one point crashed by a Daily Show reporter asking the governor for a urine sample.

But hospitals said that cut would wreak havoc on the state's health-care system and could trigger higher charges to private citizens and insurance plans to offset the losses.

"It amounts to a giant tax on the sick," said Bruce Rueben, president of the Florida Hospital Association.

Tony Carvalho, president of the Safety Net Hospital Alliance of Florida, said some hospitals' financial viability would be threatened if the cuts were approved. The average rate reduction for hospitals would be about 35 percent, he said.

"These are staggering cuts for some hospitals," Carvalho said.

Democrats also laid into the plan, saying it was an effort by the governor to bolster his approval ratings ahead of legislative and presidential elections next year.

"Leave it to the Madoff of Medicare to gut money from education only to return partial funding the following election year in a transparent effort to buoy the sagging poll numbers of the state's Republicans," Florida Democratic Party Executive Director Scott Arceneaux said in a blistering statement following the budget's release.

Legislative Democrats were only slightly more measured in their criticism. Senate Minority Leader Nan Rich, D-Weston, said lawmakers should look at ending tax breaks for corporations and demand that corporations “pay for the services they expect” instead of seeking further cuts as a source of new education funding.

"Pitting one critical priority against another is not the solution Floridians expect from the leader of the fourth largest state in the nation," she said. "School books versus seniors or teachers versus public safety should not be among the options."

Other portions of Scott's budget plan include:

--A reduction of 4,500 positions in state government, including 2,800 filled positions. Officials with the governor's office said they expected about 600 workers to ultimately lose their jobs when turnover and attrition were accounted for;

--The closing of some Department of Corrections facilities in an effort to save around $65 million, though Scott's administration said the exact number wasn't clear yet. The budget plan also counts on the state prevailing in a lawsuit challenging a policy privatizing prisons over the southern third of the state;

--Trust fund sweeps of around $147 million, though the Department of Transportation account would be untouched;

--About $23 million in tax cuts for businesses, which Scott said would be targeted mostly at small businesses, along with a constitutional amendment that could reduce tax bills further; and

--$15 million in new funding to restore the Florida Forever land-conservation program.
Republican legislative leaders, meanwhile, seemed to be unable to agree on exactly how quickly they would act on Scott's recommendations. Senate President Mike Haridopolos, R-Merritt Island, has pushed to delay a final vote on the budget until a new set of revenue estimates becomes available, likely in March. That could extend the session, slated to begin in January, or lead to a special meeting later in the year.

"I just want to deal with numbers that I feel comfortable with and not be off by hundreds and hundreds of millions of dollars. ... At the very minimum, we want to see where this economy is going before we make some final decisions," Haridopolos said in an interview Wednesday.

But House Speaker Dean Cannon, R-Winter Park, issued a statement seeming to rule out extra meetings for the spending plan.

"I am confident that [Scott's] blueprint will be a valuable tool as the House develops its own priorities and works with the Senate to pass a balanced budget by the end of the regular session," Cannon said.