By John Kennedy
The News Service of Florida
Governor Charlie Crist’s budget director told House Democrats on Wednesday that it’s virtually assured that another $1 billion in federal Medicaid help will be coming to Florida – likely by the end of this month.
But Jerry McDaniel also said that while Crist wants to see most health and human services programs maintained at current levels, he supports using some of the extra $1 billion to replace general revenue that then could be used to finance business tax breaks.
Senate Health and Human Services budget chairman Durell Peaden, R-Crestview, backed by Democrats in the House and Senate, have been clamoring for the anticipated $1 billion in enhanced federal Medicaid assistance (FMAP) to go exclusively to health and social service programs, which currently are in line for deep cuts.
The Senate is looking to eliminate the $28 million Healthy Families program and cut state payments to hospitals and nursing homes to cover a $328 million shortfall in HHS spending. The state’s costly Medically Needy program and Medicaid Aged and Disabled program also are positioned to end in December, although Peaden vows to restore these services with the extra federal aid.
McDaniel told House Democrats on Wednesday that the FMAP cash is expected to clear Congress by the end of March.
“We still believe that’s going to happen,” McDaniel said.
But Crist, Senate President Jeff Atwater, R-North Palm Beach, and House Republican leaders want to see a share of the late-arriving federal cash go toward tax reductions – particularly a 1 percent reduction in the state’s corporate income tax, now levied at a 5.5 percent rate on profits. The proposed tax cut, aimed at businesses with less than $1 million in taxable income, would pull $57 million from the state treasury.
Crist also is touting a 10-day tax-free holiday pushed by the Florida Retail Federation on back-to-school shopping, which is expected to cost about $40 million. A host of business tax incentives also are in play as lawmakers look to spark the state’s economy.
Senate and House leaders have grown increasingly confident that the Medicaid money will arrive in time to help ease a $3 billion budget shortfall. But the issue now has pivoted clearly to a struggle over how to spend the new money.
While top Republicans want to help finance tax cuts and increase school funding with general revenue taken from health and social service programs, House Speaker Larry Cretul, R-Ocala, also is demanding that lawmakers keep $1 billion in reserves to brace for an even tougher budget year in 2011, when federal stimulus money propping-up Florida’s budget vanishes.
“One the one hand Republicans complain about the federal government not having a balanced budget, and about the stimulus package,” said Rep. Ron Saunders, D-Key West. “But then when we get money for an intended purpose, they take that money and supplant general revenue. So it doesn’t do what it’s intended to do.”
McDaniel, though, also outlined other dollars that could be available to lawmakers in coming weeks as they struggle to button-up a recession-strapped spending plan.
Florida is one of 16 state finalists in the federal “Race to the Top,” education initiative – with Crist helping present the state’s final pitch this week in Washington, D.C. – for what could result in an award ranging to as much as $1 billion in additional school spending for the 2010-11 budget. McDaniel acknowledged that award is less certain than the FMAP money – with five winning states expected to be chosen in early April.
But McDaniel also echoed the governor’s long-standing proposal for lawmakers to approve a gaming compact, allowing the Seminole Tribe to offer Las Vegas-style games at its eight Florida casinos. McDaniel said the state is accumulating $12.5 million in monthly payments from the tribe already as part of an earlier compact ruled unconstitutional by the state Supreme Court.
By April 1, those continuing monthly Seminole payments will have accumulated $250 million in Indian gaming dollars now sitting in a trust fund.
“Should some semblance of a compact come about, that is money you can use,” McDaniel said.
