Carving Up Florida's Budget

Savings: TaxWatch Arithmetic

The task force's suggestions for savings — projected to total from $3.5 billion to $4.4 billion — come from the following areas:

State employee pension and healthcare benefits

• How much: $1.3 billion to $1.6 billion
• How: Among other things, ditch defined benefit plans in favor of 401(k)-like defined contribution plans.
• The realities: Government workers, needless to say, aren't welcoming the proposals. "State workers haven't received a raise this is going into the fifth year," says Doug Martin, legislative director for public employees union AFSCME in Tallahassee. "What we want to ensure is that there's a modest defined benefit (pension). It's one that allows school teachers and bus drivers, cafeteria workers and other public employees to retire with dignity."

Scott pledged to cut $1 billion from the corrections budget. [Photo: iStock]

• How much: $89 million to $394 million
• How: Don't lock up so many people. Florida could save more than $393.7 million by cutting the number of prisoners in the state's care, cutting recidivism and otherwise trimming justice costs.
• The realities: The business community has joined liberals in seeing benefits from diverting some non-violent criminals into treatment programs and away from jail. Scott campaigned on chopping $1 billion from the corrections budget. Counties that rely on local prisons as employment centers won't cheer any closures. Legislators will have to choose to undo the work of their predecessors, who wanted more prison time, more offenses classified as felonies and the elimination of parole — often in response to high-profile crimes. Cops, including the Florida Sheriffs Association, oppose letting inmates out of prison early. The sheriffs association has made opposing sentence cuts one of its legislative agenda items for 2011.

Medicaid

Taking care of seniors in their homes as opposed to nursing facilities would save about $60,000 per patient per year, according to TaxWatch. [Photo: iStock]

• How much: $635.5 million to $759.5 million
• How: Medicaid covers a fourth of Florida's children, half the births, 63% of nursing home days and 868,000 adults. Medicaid spending went up 36.4% in just the last three years and is expected to grow 24.2% over the next three, faster than the revenue to fund it is growing, and reaching $25.1 billion in 2013-14. Throw in aging Boomers and the federal healthcare law, and the picture gets worse.
  
  TaxWatch inches toward closing the gap with the likes of better care coordination, managed care throughout the state and — the biggest savings — providing more seniors with care in their homes. Care at home averages less than $5,000 per patient per year; nursing home care is $65,000. TaxWatch also recommends increasing assessments on hospital providers and putting new ones on managed care providers. Its recommendations also include reviewing co-pays for patients and cutting services the federal government says are optional for adults, such as dental, visual, hearing, podiatry and chiropractic care.
• The realities: So much depends on obtaining federal waivers allowing the state to undertake cost-saving modifications and reorganizations. The state has a pilot program in five counties requiring most Medicaid patients to enroll in managed care programs. Opinions differ on whether it saves money without harming care. Certainly, hospitals and managed care companies will have something to say about any new assessments of them. Patient advocates, patients and those who profit on them will complain of service cuts.

Purchasing

• How much: Up to $618.5 million
• How: The TaxWatch task force says the state could have saved $16 million on a recent $41-million contract if it had bought knock-off versions of brand name office supplies, food and other goods. Assume that savings applies over only half of the $1.6 billion purchased through the state's online purchasing system and you get $305 million in savings.

Grants and Collections

Florida businesses say collecting a 6% sales tax on internet sales would level the playing field for brick and mortar retailers. [Photo: iStock]

• How much: $507 million to $572 million
• How: Florida leaves money on the table by, among other things, not collecting sales taxes on online purchases and by not being aggressive enough in winning federal grants. Florida sent 5.4% of the nation's total federal gas tax payments to Washington, TaxWatch says, but received only 4.3% in return.
• The realities: The Legislature has shied in the past from going after the sales tax on online purchases, partly because it doesn't want to be seen as raising taxes. The taxes, in fact, are owed, but few Floridians pay them. Also, nuances of joining a collection-compact with other states actually could cost more money than the state gains. TaxWatch says there's a way to make implementation cost neutral and then the state will gain on the tax revenue. The Florida Chamber of Commerce, Associated Industries of Florida and the Florida Retail Federation, who all say state merchants are at a 6% competitive disadvantage to online sellers, want the state to collect the tax.

Management

• How much: $354.2 million to $406.8 million
• How: The task force recommends tying state agency budget growth to a benchmark, cutting travel, renting instead of owing vehicles when that makes sense and other ideas. A few more dollars could be raised by tweaking minor benefits: $3.6 million could come from making state garages self-sufficient by charging state employees more for parking.

Tags: Politics & Law, Government/Politics & Law