House and Senate leaders Tuesday night kicked off formal negotiations on a new state budget — but face hundreds of millions of dollars in unexpected costs and less tax revenue than originally thought.
Leaders held an initial conference committee meeting after announcing earlier in the day they had reached agreement on “allocations,” which are big-picture numbers for the various parts of the budget such as education, health care and criminal justice. House and Senate negotiators will use those numbers as they hammer out details of each budget area in the coming days.
The House and Senate have a week to finish the budget if the Legislative Session is going to end as scheduled March 9. A legally required 72-hour “cooling off” period means the budget will have to be done March 6. House Appropriations Chairman Carlos Trujillo, a Miami Republican, expressed confidence the Session will finish on time.
While numerous details still need to be worked out, Senate Appropriations Chairman Rob Bradley, a Fleming Island Republican, said, in part, that lawmakers plan to provide $80 million in tax cuts and will fund an expansion of the Bright Futures scholarship program, a priority of Senate President Joe Negron, a Stuart Republican.
Also, the agreement means that $543.6 million in more funding will be available in the health and human services section of the budget, which includes five agencies. Bradley, however, stressed that policy differences between the House and Senate still need to be negotiated on issues including how the state will reimburse hospitals and nursing homes in the Medicaid program.
Both chambers on Feb. 8 passed budget plans for the fiscal year that starts July 1, with the Senate proposing to spend $87.3 billion and the House proposing to spend $87.2 billion. While the overall numbers were similar, the House and Senate disagreed on myriad details.
But in announcing the allocations Tuesday, Bradley said lawmakers are grappling with unexpected costs and a lower estimate of corporate tax revenue than when the House and Senate approved their budget proposals.
The biggest change stems from lawmakers’ plans to spend at least $400 million in response to the mass shooting Feb. 14 at Marjory Stoneman Douglas High School in Parkland that left 17 people dead. The House and Senate are quickly moving forward with bills that include taking steps to boost school safety and mental-health services.
“The tragedy in Parkland changed everything,” Bradley said.
Bradley said leaders have agreed to spend $400 million and that additional money could come through the state’s school-funding formula.
“That is something that we do because you cannot put a price, obviously, on the safety of our children,” he said.
Bradley said, however, that will affect other parts of the budget, which lawmakers are required to balance each year.
“When you take $400 million and put it towards necessary efforts, that creates challenges in other areas of the budget, and we’re up to that challenge, and we will meet those challenges,” he said.
To help pay for the issues stemming from the school shooting, Bradley said lawmakers will take $200 million out of a reserve fund known as the “working capital fund” and will take money from trust funds that are normally earmarked for other purposes such as affordable housing. Also, the budget likely will include a reduced number of projects requested by lawmakers.
“We’re going to be lean on projects this year,” he said. “It’s necessary.”
The budget also will be tighter than originally thought because of a revised estimate last week of the state’s corporate income-tax revenue. Analysts said the state is expected now to bring in $167 million less in corporate taxes than estimated earlier.
Also, Bradley said lawmakers are faced with paying $100 million more in Medicaid expenses than what had been anticipated.
“These are bills that need to be paid. This is not a discretionary choice,” Bradley said. “These are bills that health providers have incurred pursuant to our obligations under law to provide these services to individuals. And so these are bills we will pay, because we pay our bills.”