Budget battle may doom tax cuts, school spending

Their session only days old, the Florida House and Senate appeared to already be on a collision course Thursday over how to balance the state budget.

Sen. Tom Lee, a Brandon Republican and the Senate budget chief, warned Thursday that the potential loss of more than $1 billion in federal aid for hospitals is forcing the Florida Senate to reconsider big ticket spending items.

Lee acknowledged that Gov. Rick Scott‘s push for nearly $700 million in tax cuts is in jeopardy as well as his push to boost spending on public schools to record levels.

“We’re at a standstill right now on every funding priority of state government until we address health care,” Lee said.

Lee said that the Senate would likely move ahead in coming weeks with a “mean and lean” budget that would keep the funding of many programs at their current levels with no increases. He added that a “lack of clarity” over health care spending could wind up forcing legislators to push off any final decisions until a special session in May.

But House Republican leaders so far don’t share the bleak viewpoint offered up by Senate leaders. They say they plan to work on a budget that assumes that the state will keep receiving the federal money now provided to help pay for the care of the poor and uninsured.

“It’s day three and we are continuing to work through the process,” House Speaker Steve Crisafulli said.

Rep. Richard Corcoran, the House budget chairman, said he expects Florida to work out a new deal with federal officials. He noted that other states have been able to keep their supplemental money for hospitals.

Florida lawmakers were anticipating a budget windfall of more than $1 billion this year because of the state’s gradual recovery from the depths of the Great Recession. Scott used the projected windfall to make his push for tax cuts and increased school funding as part of a nearly $77 billion budget proposal.

The looming budget stalemate is over a complicated $2 billion program that matches state and local tax revenue to draw down federal money for its hospitals. Florida first received permission for the program when Jeb Bush was governor. But the fate of the program has been in doubt ever President Barack Obama passed his health care overhaul.

Federal officials warned last year it would not extend the program beyond this year. Hospitals have tried to use the loss of the money as a reason to accept federal aid that would be made available if the state expanded its Medicaid program as allowed under the health care overhaul.

But House Republicans have steadfastly rejected any talk of extending Medicaid coverage to as many as 1 million Floridians. They have called Medicaid an already broken system and expressed skepticism that the federal government would follow through on its payment promises.

Senate President Andy Gardiner opened this year’s 60-day session this week by saying that because of the loss of the hospital money, the Senate would consider an alternative form of Medicaid expansion. The plan calls for accepting Medicaid money and then giving it to consumers so they could purchase private insurance.

Legislators could try to use state money to replace the lost federal funding, but Scott wrote in a letter to President Obama this week that he would not agree to that. Lee said that he would not want to risk a possible budget veto from the governor.

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Republished with permission of The Associated Press.