House, Senate reach deal on nearly $50B in budget allocations

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Just one day before budget conferences are set to start in the Legislature to iron out a past-due budget, legislative leaders have reached an agreement on budget allocations, a critical step before negotiating the finer details.

The allocations total $49.96 billion, with the largest allocation going toward health and human services, at $17.5 billion.

Behind that is the state pre-K-12 education allocation, at $16 billion. The allocations also slot $6.5 billion for higher education and another $6.5 billion for criminal and civil justice. Lawmakers would also provide $1.5 billion for agriculture and the environment, with $675 million for general government, $553 million for transportation, tourism and economic development, and $527 million for administered funds and statewide issues.

The allocations will be part of a broader budget for the 2025-26 fiscal year, which begins July 1.

The Senate originally proposed a $117 billion overall budget, with the House coming in about $4.4 billion less than that with a more aggressive cut to recurring spending. That became a source of contention between the two chambers and led to lawmakers needing to extend the Session to negotiate the impasse. Gov. Ron DeSantis, meanwhile, had proposed a nearly $116 billion budget, landing between the House and Senate numbers.

A budget memo from Senate President Ben Albritton and House Speaker Daniel Perez sent Friday indicates that a new budget should be passed June 16. It includes $2.25 billion in recurring revenue reductions, a sticking point for the House during protracted negotiations, but far less than the House had originally sought.

Those reductions include $900 million in cuts through eliminating the business rent tax, a priority of Perez, $350 million in permanent sales tax reductions and $250 million in debt reduction. The budget will also include $750 million in annual payments to the state Budget Stabilization Fund, which serve as rainy-day resources.

On the rainy-day funds, the budget calls for increasing the fund from 10% to 25%, allowing the $750 million payments until the new cap has been reached. The Senate will take up a joint resolution to amend the Florida Constitution to raise the cap, which will also require voter approval.

Conferences have been authorized Tuesday to run from 9 a.m. through 8 p.m. and from 8 a.m. until 8 p.m. on Wednesday, with a Legislative Budget Commission meeting from 11 a.m. until 12:30 p.m. Conferences are only authorized from 8 a.m. until 2 p.m. on Thursday, with a Senate sitting from 10-11 a.m.; a Senate Appropriations meeting from 2:30-5 p.m.; and another Senate sitting from 5:30-6 p.m.

Any unresolved issues in the budget after the Thursday conference will bump to budget chiefs in their respective chambers, Sen. Ed Hooper and Rep. Lawrence McClure.

The Legislature tentatively will hold a Senate sitting on Monday, June 16, at 1 p.m. to approve the finalized budget after the required 72-hour cooling off period. An exact time will be determined once lawmakers know when that 72 hours expires.

Once lawmakers approve a finalized budget, it heads to DeSantis, who has line-item veto authority. He’ll have about two weeks to review the budget and make vetoes. Theoretically, he could veto the whole budget, though that move is unlikely considering the threat of a government shutdown if a budget isn’t signed by July 1.

Chief budget negotiators reached an impasse on tax cuts, with the House favoring a reduction to state sales tax in an effort to cut recurring revenue and encourage a more lean budget that would protect the state into the future. The Senate, meanwhile, never really warmed up to the House position, offering instead things like an elimination of sales tax on clothing and shoes up to $75, additional sales tax holidays and a business rent tax reduction.

The House’s original sales tax reduction pitch was to cut the state rate from the current 6% to 5.25%, which would have reduced recurring revenue by about $5 billion.

Muddying negotiations even further, DeSantis’ priority has been — and remains — moving toward drastically slashing property taxes. He also was vocally opposed to the House sales tax plan.