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Governor Bush Unveils Executive Budget for Fiscal Year 2003-2004

January 21, 2003

Governor Jeb Bush today announced his budget recommendations for Fiscal Year 2003-2004, recognizing that Florida is much better off than most of the nation, but also acknowledging in a tough budget year the state must focus on its key priorities.

"I'm proud that Florida is one of the few places in the country that will see increases in education, child welfare and services for the elderly. At the same time, cost pressures related to the constitutional amendments as well as a still recovering economy, will force us to make some very difficult choices," said Governor Bush. "What is perhaps most concerning is the bleak budget forecast brought upon us by the need to implement Amendment 9, high-speed rail and other voter-mandated initiatives beginning next year. With this in mind, today’s announcement represents my recommendations for the budget year, and I look forward to working with the Legislature on these issues in the coming months."

Florida’s General Revenue budget for FY 2003-2004 will grow by 3 percent, or $633 million, for a total of nearly $22 billion. Florida is projected to end the current year, FY 2002-03, with a $140 million surplus in the General Revenue fund and $960 million in its "rainy day fund." This contrasts sharply with most other states, some of whom are experiencing budget deficits as high as 20 percent. Across the nation, the collective state budget shortfall is expected to be $45 billion this year. In his speech, Governor Bush noted that fiscal discipline, including spending restraint, vetoing so-called "turkeys," reducing bureaucracy and other government efficiencies, a doubling of the states reserves in the past four years as well as tax cuts were all instrumental in Florida's relative success.

Governor Bush also highlighted the budget uncertainties related to the upcoming implementation of constitutionally mandated initiatives such as class size, pre-K, and high-speed rail. Over the past four years, General Revenue spending has increased in concert with increases in personal income, a key factor in Florida’s current budget stability and the state’s ability to hold the line on tax increases. With the implementation of the constitutional amendments, spending will far outpace personal income, forcing tax increases and budget constraints that states like California currently face. Additionally, should Florida choose to bond money to pay for the initiatives, the state’s debt would likely reach excessive levels that could damage Florida’s credit rating and ability to borrow money at low interest rates.

"While this year’s budget continues to fund state priorities, the class size amendment is taking its toll- university and college spending are one example. Its impact on future budgets will be even more severe, creating across the board cuts, significant tax increases and potentially forcing our state to tax and spend itself into a deficit situation currently experienced by other states across the country," said Governor Bush.

Governor Bush’s recommended budget Fiscal Year 2003-2004 includes:


K-12: Governor Bush recommends an $899 million, or 6.8 percent, increase for K-12 education. That increase will bring Governor Bush’s five-year total to $3.8 billion or 34 percent.

Per student funding: The Governor’s budget recommends a $247, or 4.65 percent, increase per student. These increases also fully cover the estimated 53,400 additional students who will enter the public school system next year. Over the past five-years, per student funding has increased nearly $1,000 per student, or 20 percent.

Just Read, Florida!: Governor Bush recommends $80.7 million for Just Read, Florida! State funds will make up $30 million, a $19 million or 172 percent increase over last year, and $50.7 will come from the federal Reading First grant, an increase of $5.1 million over last year.

Reading teachers: The Governor also recommends a $5.1 million increase for the Critical Teacher Scholarship Program for a total of $8.9 million this year. Under the Governor’s budget, $3 million of this funding would be designated to assist reading teachers. In addition, the Governor recommends that $18 million of the $36 million in professional development funding for districts be used to assist teachers in teaching reading.

Teacher initiatives: The Governor recommends $281.5 million, including federal funding, for teacher initiatives for 2003-04. This includes $14.2 million for recruitment and retention activities. The Governor recommends $75.9 million for Excellent Teachers program, a $27.2 million or 56 percent increase over last year, to help ensure that Florida becomes the national leader in nationally board-certified teachers. Florida has 3,489 teachers who already have been certified, and Governor Bush seeks to have 12,000 nationally certified teachers by 2008. Governor Bush also proposes $16.2 million for the Teachers Lead program, which provides teachers with $100 for classroom supplies. Additionally, the FY 2003-04 proposed budget continues to fund the Barry Grunow Acts death insurance for teachers at $165,000 and $1.2 million for professional liability insurance for all full-time and part-time instructional personnel. The professional liability insurance protects teachers from liability for monetary damages in defense of actions resulting from claims made against them during the course of activity in their professional capacity.

Amendment 9: Governor Bush's new "Classrooms for Kids" plan will provide $2.8 billion over the next eight years to meet the projected construction costs of implementing the amendment to reduce class size. The plan includes the use of projected growth in the Communication Services Tax and funds from the Florida Lottery to pay for bonds during a period of 20 to 30 years. This funding for school construction is in addition to $268 million from the Public Education Capital Outlay (PECO) Trust Fund, the traditional source for the state to provide construction funds to public schools.

Mentoring Initiative: The Governor’s FY 2003-2004 Recommended Budget includes $12.25 million for mentoring. These funds will be appropriated to statewide and local mentoring groups in order to continue the support of mentoring and tutoring in Florida’s schools and after school programs.

Community Colleges: Total funding for community colleges will be $1.4 billion, which is a 1.8 percent increase over the current year. This includes $27.6 million for facilities challenge grants and a recommended 7 percent tuition increase. However, due to implementation of Amendment 9, community colleges will not receive additional funds to cover increases in student enrollment.

Universities: Total funding for universities will be $2.4 billion. This includes $79.1 million for facilities challenge grants and a recommended 7.5 percent tuition increase. The Governor’s proposed budget also recommends additional tuition flexibility of up to 5 percent for in-state tuition, unlimited tuition flexibility for out-of-state, graduate and professional students, and flexibility in the use of $123 million of carry forward funds. However, in order to fund the priorities of implementing the class size initiative, universities will experience a $111.5 million cut in state funds, enrollment growth will not be funded, and $76 million of university PECO funds will used to reduce class size in public schools.

Health and Human Services:

Overall funding: Governor Bush recommends a $1.1 billion increase for health and human services this year, for a total increase of $7 billion or 56 percent over the past five years.

Child welfare: This year’s budget includes a $138.2 million, a 15.9 percent increase, in child welfare funding this year. These monies primarily go to fund Blue Ribbon Panel on Child Protection recommendations, including increasing salaries for caseworkers, prevention initiatives, quality assurance and background screenings. Community-based care is a key component in Governor Bush’s efforts to reform Florida’s child welfare system. To assist communities in this effort, the 2001 and 2002 Legislatures funded a Community Partnership Matching Grant Program, which provides $10 million in matching funds for start-up in those areas where the local community has agreed to put up matching funds. The Governor’s budget for FY 2003-04 continues this program for another year.

Child healthcare: Under Governor Bush, nearly 1.6 million children will have health care insurance by June 2004, more than double the number of children covered four years ago. Funding for this program has increased $1.5 billion since FY 1998-99.

Developmentally disabled: Funding for the developmentally disabled will increase by $116.1 million under Governor Bush’s recommendations for a 118.1 percent increase over the past five years.

Substance abuse: Reducing drug abuse has been a priority for Governor Bush, and national surveys indicate Florida is making steady progress toward reaching its goal of an overall 50 percent reduction in illegal drug use. Almost halfway to its 2005 objective, Florida had reduced its drug use rate by 31 percent, or 62 percent of its overall reduction goal. Governor Bush proposes investing more than $280 million in FY 2003-04 for all drug control and substance abuse initiatives. This is an increase of $96.5 million or 63 percent over last year and a 40 percent increase since 1998-99.

Care for Florida’s elders: Governor Bush proposes $414 million for community based care for Florida’s elderly. This is a $160 million increase over the past five years, allowing some 270,000 elders to receive care in an environment most suited to their individual needs. Governor Bush has also worked to increase nursing home quality through the Gold Seal program, as well as ensure care for Florida’s veterans. The Governor’s recommended budget includes $39.5 million for veterans nursing homes, which will more than double the new beds.

Prescription drugs: The Governor’s Silver Saver program is projected to serve more than 73,000 seniors through June 2004. Since August, the Silver Saver program has enrolled more than 6,000 new recipients - that is approximately 400 new enrollees per week. The Governor recommends a $6.5 million increase for this important program, bringing total funding to $109.4 million and continuing to enroll new seniors at the same rate per week for the next fiscal year.

Medicaid spending: The Governor recommends $191.5 million for the Medicaid Spend Down program, also known as Medically Needy. Those children and pregnant women currently enrolled in the Medicaid Spend Down Program will continue to have the coverage they now receive. For all other adults in this program, the Governor’s Recommended Budget will assist with one of the most costly medical expenditures- prescription drug coverage. This will be available to those adults impacted by the sunset of this program and will consist of the full Medicaid pharmacy benefit. This prescription drug coverage will be accomplished through an enhancement of the Silver Saver prescription drug program designed specifically for this affected population. In addition, each area Medicaid office maintains a list of community health resources available to assist these individuals. Some examples include We Care Volunteer clinics, free health screening sites, and more.

Public Protection:

Crime is down: Under Governor Bush, Florida’s index crime rate is the lowest in 29 years. 10-20-Life has helped drive violent firearm crime down by 24 percent in three years and juvenile arrests for serious crimes are down by almost 14 percent.

Prison funding: State prisoners are now serving an average of 83 percent of their sentences, compared to less than 50 percent in 1994. Governor Bush has proposed investing $1.4 billion in the Fiscal Year 2003-04 recommended budget to incarcerate more than 74,000 dangerous, violent and repeat offenders sentenced to state prison for felony convictions. The Governor’s Recommended Budget includes $75.7 million for the construction of 4,148 new prison beds to ensure that our state never returns to the "revolving door" policies of the early 1990s, which allowed early release for criminals to kill and injure innocent people. This investment in state prisons pays public safety dividends in lower crime rates, safer streets and lives saved.

Domestic Violence: Governor Bush has led the effort to enact significant legislation to punish and prevent domestic violence, and by doubling the funding over the past four years, has made this issue one of his priorities. This has helped domestic violence is down by nearly 15 percent in the past three years. This budget year, the Governor recommends $37 million for the continuation of programs to help those who are victims of abuse in their own homes. Over the past four years, a total of $138 million has been expended to support these efforts, including $8 million for the renovation of the state’s domestic violence centers.

Domestic Security: Vice-President Dick Cheney recognized Florida’s Domestic Security as "a model of how homeland security coverage should operate at the state level." Almost $129 million has been invested in domestic security since September 11, 2001. The Governor this year recommends an additional $89.5 million to enhance Florida’s domestic security and prevent terror attacks. Funding includes $25.2 million for emergency management, $20 million for seaports, $15.4 million for agriculture, $7.4 million for health and bioterrorism and $1.8 million for cyberterrorism.

Increased Protection For Florida Seniors and Disabled Persons: Governor Bush proposes tougher mandatory sentences for financial crimes against seniors. The proposal includes a 3-year mandatory prison term for felony grand theft, with losses of $10,000 or more when the victim is 65 years of age or older, an impaired senior, or disabled person. Additionally, Governor Bush proposes enhancing all criminal penalties by one degree, when the victim is 65 years of age or older. This proposal would extend reclassification to crimes such as burglary and theft, and violent crimes such as murder, robbery, and rape. This proposal would significantly expand judicial discretion to appropriately punish offenders who victimize seniors.

DNA and Technology Advances in Florida Law Enforcement: Florida has been a national model in the state’s use of DNA data. Since the creation of the DNA database, FDLE has made approximately 800 identifications, and assisted in more than 1,000 investigations. Governor Bush’s FY 2003-04 Recommended Budget contains $243,275 in funds for the DNA Offender Database and Serology program, increasing Florida’s total investment to date in this critical investigative database to $18.8 million. In addition, the Governor’s Recommended Budget provides $2.8 million to enhance the Department’s Integrated Criminal History System which will combine the Automated Fingerprint Identification System (AFIS) and the Computerized Criminal History System (CCH). The state has invested more than $7 million to date for the Intergraded Criminal History System, which is an invaluable technological advantage for law-enforcement agencies.

Juvenile Justice: The Governor proposes several major changes in the Department’s budget to ensure that focus is on the core mission of reducing juvenile crime during a time of limited budget resources. In keeping with the traditional assignment of criminal-justice responsibilities, the Governor’s Recommended Budget proposes a $64.3 million shift of detention responsibility to counties. Like the adult system, local governments will pay the costs of detaining alleged juvenile offenders until a court adjudicates the offender as a delinquent, while the state will continue to provide residential commitment for juvenile offenders adjudicated by the courts and assigned to the custody of the Department of Juvenile Justice. With the view that agencies best use valuable tax dollars by performing those functions specifically within the agency’s area of expertise, the Governor recommends transferring the "Children In Need of Services/Families In Need of Services" program from DJJ to the Department of Children and Families. 

Natural Resources and Environment:

Everglades Funding: This year, in recognition of the need to continue to develop a dedicated source of funding for Everglades restoration while not incurring future indebtedness, Governor Bush recommends that $300 million from the Florida Forever and Preservation 2000 Reserve Accounts be deposited into the Save Our Everglades Trust Fund. This pays ahead the state’s commitment of $100 million per year for the next three fiscal years, through FY 2005-06. Nearly $400 million will have been appropriated by the Legislature for Everglades restoration with $156 million used for the purchase of 25,250 acres of land in South Florida needed for restoration projects. Due to a tight budget year, the Executive Budget recommends $75 million from the Save Our Everglades Trust Fund to continue to implement the Comprehensive Everglades Restoration Plan, to be matched with approximately $75 million from South Florida Water Management District funds, $25 million from Florida Forever and $25 million from local governments, for a total state and regional commitment of $200 million for this fiscal year.

The Florida Forever Program: The Governor and Legislature have committed $300 million in each fiscal year since the Florida Forever Act became law on July 1, 2001. The FY 2003-04 Executive Budget recommends $300 million for implementing the Florida Forever program since July 2001 more than 126,000 acres have been acquired under this program. This is in addition to the 1.7 million acres acquired through the Florida Preservation 2000 initiative. The Florida Forever Act improved upon the Preservation 2000 program by emphasizing better patterns of protection for ecosystems.

Florida Springs Initiative: The Florida Springs Initiative, begun in FY 2001-02, is intended to protect and restore Florida’s 33 first magnitude (largest) freshwater springs through the establishment of spring discharge monitoring networks, water quality and biological monitoring programs, best management practices, creation of private-public partnerships, and the development of spring restoration action plans. To continue to protect, preserve and restore Florida’s unique freshwater springs, Governor Bush recommends $2.5 million in the Executive Budget for FY 2003-04.

Water Resource Protection: The Executive Budget recommends $166.5 million for water resource protection and surface water restoration projects. In an effort to create a more efficient program for water resources funding, the Executive Budget will focus on directing current and new wastewater projects to the State Revolving Fund, and proposes to eliminate the cap of $100 million on the State Revolving Fund. The Governor also recommends an additional $6.5 million for small community grants. The Governor also proposes $17 million for surface water improvement and storm water management. This funding is to be matched dollar for dollar by the water management districts and their local partners to create a partnership at all levels to protect Florida’s waters.

Manatee Protection: For the third consecutive year, Governor Bush has recommended record funding for manatee protection. In 2001, the Governor and Legislature provided $14 million for manatee protection. This included funding for 25 new law enforcement positions, technology and equipment enhancements, public education, boat access facility planning and permitting, development of manatee protection plans and increased enforcement of slow speed and no-wake zones. Last year, Governor Bush recommended the designation of ten new sanctuaries for manatees, increasing to 14 the number of federal refuges and sanctuaries that protect essential manatee habitat. This year, the Executive Budget recommends $9.1 million for manatee protection. This brings to approximately $42 million the total provided for manatee protection since FY 1999-2000.

Smaller, More Efficient Government:

Tax Relief: Under Governor Bush, Floridians will have realized more than $8.1 billion in tax relief over the past five years. The Governor’s recommended budget recommends a $59 million sales tax holiday, which includes nine days of sales tax exemptions for clothing and a month of savings for books. The Governor also recommends the continuation of the seniors and savers tax cuts, and accelerated depreciation for corporate investments. As a result of piggybacking on the federal corporate tax deferral, Florida is expected to see corporate tax revenue projected to increase by 23 percent next year. In addition, property tax rates have dropped by 0.7 mills (almost 11 percent) since FY 1999-2000. The tax savings in FY 2003-04 alone is expected to be more than $600 million, directly affecting more than 3.7 million homeowners and hundreds of thousands of businesses annually. The cumulative savings over four years is expected to be $2.4 billion.

Budget reserves: Over the past five years, budgetary reserves have increased dramatically. Rising from $1.3 billion in FY 1998-99 to $3.0 billion in FY 2003-04, reserves have more than doubled. While other states drained their reserves following the September 11 tragedy, Florida maintained its reserves. Of the $3 billion in current reserves, $966 million is in the constitutionally-established Budget Stabilization Fund

to serve as a last-resort buffer against major General Revenue fund shortfalls and other emergency situations. In addition, the Working Capital Fund, which is essentially unencumbered General Revenue, is expected to be $202 million.

Budget restructuring: To further guarantee that your money will be put to its best use, Governor Bush and the Legislature have restructured Florida’s budgeting process to clearly identify each agency’s mission and core business processes. The Governor’s goal is to spend taxpayer dollars on programs and services that are critical to achieve our major policy goals, that are performing at or above expectations, and that are administered efficiently. Since 2000, each agency has been required to submit long-range program plans which identify and rank its programs and services and track agency accomplishments toward achieving the desired level of performance for each service. The Fiscal Year 2003-04 Recommended Budget directly reflects agency missions and highest priority programs and services.

Department of State and Community Partnerships: The Department of State is a service agency centered on assistance to communities, a mission which coincides with that of other agencies. The Department of Community Affairs shares this focus and provides both technical and financial assistance to Florida’s communities. The Department of Environmental Protection contains several community related programs providing grants to local entities for parks and recreation. The Governor’s Office, through the Office of Tourism, Trade and Economic Development, also helps communities through the Front Porch Florida initiative and the rural community development grant program. Housing these programs in one agency should improve the state’s service to communities and help strengthen them by assisting them in realizing their goals and providing efficiencies in delivering important government services. The Executive Budget recommends merging the departments of Community Affairs and State into a new agency to oversee the state’s primary community assistance programs.

Trust Fund Review: Tax revenues, as previously described, are deposited into the state’s all purpose fund known as General Revenue. General Revenue makes up 42 percent of the state budget. The other 58 percent is from Trust Funds. Trust Fund revenue consists of fees and assessments paid by certain entities for regulation of industries, federal grants, bond proceeds and other types of funds that have generally required some sort of segregation. Currently, there are approximately 450 trust funds in existence. Having this many trust funds has created a number of problems through the years, including inappropriate accounting of funds, inequitable funding of programs, budgeting and accounting complications and burdensome administrative procedures and unnecessary paper work. As a result, the Governor’s Recommended Budget will reflect the beginning phase of consolidation of trust fund revenue into the General Revenue Fund. 

For more information on the Governor’s budget recommendations, visit his e-budget at http://www.ebudget.state.fl.us