GOVERNOR BUSH ANNOUNCES 2004-2005 
EXECUTIVE BUDGET

Source: The Executive Office of The Governor

January 20, 2004

~Fiscal stewardship grows budget, increasing opportunity and security for Floridians~

     TALLAHASSEE - Governor Jeb Bush today unveiled the Bush/Jennings Administration's Executive Budget Recommendations for Fiscal Year 2004-2005, demonstrating the Administration's ongoing commitment to funding the state's priorities while providing Floridians the best possible return on their tax dollars. The budget invests in Florida's future with funding for key programs for education, economic development and services to strengthen Florida's families, while holding the line on overall spending growth.

     "I thank the Legislature for its fiscal restraint and discipline in difficult economic times. Through this resolve, we have built a prosperous economy that has yielded increasing state revenues, allowing us to support Florida's many budget priorities. The budget I propose today focuses those dollars on our continuing commitment to education, on helping our most vulnerable and on creating stronger families and safer communities," said Governor Bush. "While we should applaud our fiscal success, we must recommit ourselves to the principles that brought us here. With this in mind, I present my recommendations for the upcoming budget year, and I look forward to working with the Legislature on these issues in the coming months."

     Florida's Fiscal Year 2004-2005 budget would grow by 2.6 percent, well below projected personal income growth. The Governor recommends an overall increase of $1.4 billion for a total of $55.4 billion. That figure includes $23.8 billion in general revenue and approximately $3 billion in reserves. Governor Bush attributed the state's budget growth to fiscal stewardship in recent years and to a climate of economic growth. However, he warned that to ensure the state's economic future, the state cannot spend more than it receives.

     Governor Bush and Lt. Governor Toni Jennings also advocated for reforms to restrain the growth in the Medicaid budget and highlighted other budget uncertainties related to the implementation of constitutionally mandated initiatives. To demonstrate the impact of these increasing costs, the Governor pointed to Florida Medicaid's $13.8 billion total budget this year. The $1.1 billion increase this year brings Medicaid funding to almost a quarter of the entire state budget. Medicaid costs are rising at an average of nearly 11.7 percent a year, with the overall cost of the program nearly doubling in the last six years. If this trend continues, Medicaid costs will triple in the next decade. Governor Bush also pointed to the 108.6 percent increase in operating costs for class size, bringing the two-year cost to $1.4 billion, not including millions more in capital costs. By the tenth year, the state is estimated to spend $2.3 billion a year to cover operating costs related to this amendment. Adding to Florida's future budget dilemma is the high-speed rail amendment which could cost as much as $11.3 billion for Phase I and II implementation.

     "This year, we stand in the eye of the hurricane," Governor Bush said. "We have emerged from the stormy fiscal conditions of previous years, but even more severe budget conditions threaten our long-term fiscal future. Skyrocketing budget demands for health care, education and high-speed rail could greatly hinder our ability to fund the priorities that are important to Floridians."

Governor Bush and Lt. Governor Jennings' Recommended budget for Fiscal Year 2004-2005 includes:

EDUCATION

•  K-12: Governor Bush recommends $15.9 billion for public schools.  This is a $1 billion, or 7.12 percent, increase for K-12 education. Governor Bush has increased education funding by $4.8 billion, or 43 percent, in the past six years.

• Per Student Funding: The Governor's budget recommends a total of $6,100 (a 4.85 percent increase per student). These increases also fully cover the estimated 55,000 new students who will enter the public school system next year. During the past six years, per student funding has increased more than $1,000 per student, or 25 percent.

• Reading Initiatives: The Bush/Jennings Administration recommends $143.5 million in state and federal funding for Just Read, Florida! and other reading initiatives, a $23.2 million increase over the current year.

• Reading Coaches: Part of the reading initiative increase includes $13 million to put 240 reading coaches in Florida's lowest performing middle schools, supporting the Middle Grades Reform Initiative. Total literacy support in public schools will place an approximate 1,010 reading coaches in elementary, middle and high schools.

• Universal Pre-Kindergarten: In 2002, Floridians voted to offer free, high quality universal pre-kindergarten. The Universal Pre-Kindergarten Advisory Council, which Lt. Governor Toni Jennings chaired, recently released recommendations for providing a quality pre-kindergarten experience. Governor Bush has recommended $9.6 million for the professional development of 8,500 childcare workers to prepare for the 2005 implementation of the initiative.

• Community Colleges: Total funding for community colleges will be $1.5 billion, which includes a $104.5 million, or 7.6 percent, increase in direct support to the colleges, the largest increase in 14 years. Also included in the budget recommendations are $22.3 million for academic matching grants and another $8.5 million for facilities challenge grants to fully fund the current backlog in these programs.

• Universities: The Bush/Jennings budget recommendations also include an increase of $144.1 million in direct support to our universities, including $131.4 million to support additional student enrollment and $10 million to address critical areas of need in Florida. In addition, $20 million is provided to create two new Centers of Excellence at Florida universities. The Governor also recommends $25 million to match private donations to state universities for academic matching grants.

STRENGTHENING FAMILIES:

• Child Welfare: This year's budget includes nearly $1 billion for child welfare programs, a 136 percent increase since Fiscal Year 1998-99. This represents a $47 million net increase over Fiscal Year 2003-04. The Bush/Jennings Administration's Executive Budget recommends $10 million in behavioral health care services for children in residential group care, $30 million to continue the transition of foster care services to community-based agencies, $4 million to prevent child abuse and $6 million for contracts with sheriffs for protective investigations.

• Increasing Adoptions: In November, the No Place Like Home initiative was launched to streamline the adoption process and increase adoptions in our state. Governor Bush is recommending $128.8 million to increase adoptions, $21 million more than current year funding.

• Developmentally Disabled: Funding for the developmentally disabled will increase by $43.5 million for a total of $1.1 billion. Since Governor Bush took office, funding for these programs has increased by $638 million. More than 32,000 Floridians are served through developmental services programs. This funding will allow the state to serve up to 3,200 additional people next year.

• Care for Florida's Elders: Governor Bush proposes a $25.8 million increase to help seniors maintain independence and avoid nursing home care. The Bush/Jennings Administration recommends a $12.1 million increase for Nursing Home Diversion, and an $8.8 million increase for the Medicaid Aged and Disabled Waiver for the elderly. Also included in the budget recommendations is a $3.1 million increase for Medicaid Assisted Living for the elderly and a $1.1 million increase for an Alzheimer's disease initiative. These new funds will provide services for up to 3,300 frail elders.

• Veterans: During the past six years, funding for veterans has increased by 106 percent, including $48.4 million recommended for the next fiscal year. The Executive Budget includes $631,000 for the planning and development of Florida's sixth veterans' nursing home.

• Medicaid: Governor Bush and Lt. Governor Jennings recommend fully funding the projected increases in Medicaid costs for the coming year. Their budget includes $13.8 billion for the state's Medicaid budget, a $1.1 billion increase over last year. $526.1 million of the state's funds will go to maintaining the current program, with another $144.5 million in state funds allocated for prior year deficits.

• KidCare: Governor Bush and Lt. Governor Jennings propose $3.2 billion in total funding for KidCare. This funding will allow us to provide health care coverage to 50,000 children through Medicaid. It also includes an increase of $29.7 million to serve an additional 10,500 children currently on the waitlist for Healthy Kids, MediKids and Children's Medical Services. Florida's KidCare program serves 1.6 million children today, 755,000 more than in 1998.

• Substance Abuse: Reducing drug abuse has been a priority for Governor Bush. This year's proposal invests more than $193 million for community prevention and treatment, restoring $9 million for prevention treatment, as well as $8.5 million for treatment of Floridians in our court system. It adds $5.6 million for prevention, treatment and aftercare services. An additional $64.6 million is recommended for offender prevention and treatment, a 23.8 percent increase over current year funding. This restores $4.1 million for offender outpatient and residential treatment and $8.3 million for in-prison substance abuse programs.

• Tobacco Prevention: The Bush/Jennings Administration recommends $16 million for the Tobacco Prevention program, a $15 million increase over current year funding. Florida has spent more than $222 million on tobacco prevention programs since 1997-98, $22 million more than originally earmarked. This year's recommendations make tobacco prevention a permanent program in the Department of Health's budget.  Funded entirely with recurring dollars, the new program will now be able to develop long-term plans and implement a multi-year strategy.  Recurring dollars will provide long-term stability for the program.  This new tobacco initiative will incorporate and expand best practices identified during the six years of the now ended Florida Tobacco Pilot Program.

ECONOMIC DEVELOPMENT:

• Economic Growth and Diversification: The Bush/Jennings Administration recommends $129 million for economic development tools and incentives, a 50 percent increase over the current year. This includes $11 million to fund Enterprise Florida. The budget also provides $25 million in new funding for the Quick Action Closing Fund to help Enterprise Florida and local economic development organizations secure major, highly competitive projects. Additionally, the Governor recommends $21.7 million to promote Florida as a premier tourist destination. Another $33.8 million is allocated to fund programs that encourage, expand, retain and recruit business in key industries, and $2.9 million is recommended for space business development.

• Military and Defense: The military and defense industry adds $44 billion annually to Florida's economy. Governor Bush and Lt. Governor Jennings are committed to supporting the state's 21 military bases and three unified commands, especially during the 2005 Base Realignment and Closure (BRAC) process. The Bush/Jennings Administration has included $7.4 million for programs designed to prepare Florida for BRAC, a 27.6 percent increase. This includes $3 million new dollars in defense infrastructure, $3.4 million continued for military base protection and another $1 million continued in defense reinvestment funds.

• Transportation: Governor Bush and Lt. Governor Jennings consider a well-designed and well-maintained transportation system critical for economic development. The Governor recommends investing $5.8 billion in Florida's transportation work program, a 4.7 increase over current funding. The budget represents $2.2 billion for new contract lettings, one of the highest allocations in the state's history. Rural Counties: Governor Bush's budget would invest $174 million in Florida's rural counties. This is a 77 percent increase over current year funding. $25 million would go to the Rural Transportation Program, providing road resurfacing and capacity improvements related to transportation. Additionally, the Governor has asked for $10 million for Small Community Wastewater Treatment Grants, a 186 percent increase over current funding. Another $5 million in new funding will help rural counties meet infrastructure needs and other general government funding needs. Governor Bush is also recommending an additional $9 million next year to support schools in rural counties, as well as $71.4 million for special education capital projects. This includes $36.8 million for new construction projects and $34.5 million for projects already underway. The Bush/Jennings Administration also recommends $5 million in new funding for cultural and historic projects in rural counties and $3 million in new funding for public library assistance in those communities.

STRONGER, SAFER COMMUNITIES:

• Crime is Down: Under Governor Bush, Florida's index crime rate is the lowest in 30 years. During the last six years, $1 billion has been restored in retirement benefits for law enforcement officers and firefighters. Disability compensation has increased by more than 50 percent for special risk professionals injured in the line of duty. In addition, the Governor has increased funding for the Florida Highway Patrol by 25 percent since 1998-99.

• Prison Funding: During the last four years, the index crime rate has dropped 21 percent in Florida, in part because convicted criminals are now serving 85 percent of their sentences. Governor Bush has instituted a 43 percent increase in prison funding over the last six years. The Bush/Jennings Administration recommends $99.6 million for new prison construction, to ensure state prisoners continue serving 85 percent of their sentences and to help keep crime rates low.

• Revision 7 Funding: Revision 7 to Article V of the Florida Constitution transfers significant costs of the judicial branch from local government to state government, lessening the burden on local communities. Governor Bush has proposed $223 million for Revision 7 funding, including $3.7 million for 40 new judges and 40 new support staff. The Governor's recommendations include $102.6 million for state courts and $120.4 million for state attorneys, public defenders, private attorneys fees in criminal and dependency cases, due process legal costs and other related costs.

• Domestic Security: Florida has invested $403.2 million in domestic security funding, creating a model for the nation in homeland security at the state level. Florida most recently received an additional $92.7 million grant from the U.S. Department of Homeland Security to support Florida's first responders.

NATURAL RESOURCES AND ENVIRONMENT:

• Everglades Funding: Florida continues to meet its commitment to fully fund its share of Everglades restoration. With the Bush/Jennings budget proposal, more than $500 million will have been appropriated during the past five years, ensuring the restoration continues ahead of schedule and under budget. This year's recommendations include $100 million in General Revenue funding. This funding allows Florida to fully meet its financial obligations for restoration while keeping the state in sound fiscal standing by limiting debt. As a partner in this project, the South Florida Water Management District will use the funds to acquire land, accelerate construction projects, optimize Stormwater Treatment Areas and conduct feasibility studies.

• 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 Bush/Jennings budget recommends $300 million for this program, with $40 million paid in cash. In the past, funding has been provided through bonding. This year's proposal is in keeping with Governor Bush's desire to limit debt. Since July 2001 more than 253,000 acres have been acquired under Florida Forever. 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.

• Energy Initiatives: Governor Bush wants Florida to become an incubator for alternative energy sources, which will foster growth, facilitate economic development and protect our clean air and environment. The Bush/Jennings budget includes $15 million in seed capital to share the costs of installation and demonstration of hydrogen fuel cells by Florida companies. These funds will make Florida ready for next generation energy technology, and will help defray the costs of creating mobile hydrogen fuel cells and fueling stations.

• Florida Keys: The Bush/Jennings budget proposal includes $18 million for construction of local government wastewater systems in the Florida Keys Area of Critical State Concern. Keys land conservation is a priority of the Administration, and it is expected approximately $90 million of existing Florida Forever funds could be used to acquire environmentally sensitive land in the Florida Keys Area of Critical State Concern in the next three years.

• Florida Springs Initiative: Governor Bush continues his commitment to protecting Florida's springs by recommending an additional $2.5 million in FY 04-05. This will bring the state's commitment to the Florida Springs Initiative, which began in FY 01-02, to $10 million. This important program protects and restores 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.

• Water Resource Protection: The Bush/Jennings budget recommends $178 million in grants and loans for drinking, storm and wastewater projects. Recognizing the need to protect and restore Florida's invaluable water resources, Governor Bush has consistently acted to improve the process and the amount of funding for water restoration and wastewater treatment projects. Since FY 00-01, more than $1.8 billion in state and federal funding will have been provided for 738 water restoration, drinking water, and wastewater projects through out the state.

• Manatee Protection: This year, the Executive Budget recommends $10.9 million for manatee protection, the fourth consecutive year that Governor Bush has recommended record funding for manatee protection. This brings the total funding for manatee protection to more than $54 million since FY 99-00. The new funding will provide education materials, support rulemaking activities, provide contractual support to counties to develop manatee protection plans, and provide staffing to review permits and leases.

• Cultural and Historical Projects: This year, the Executive Budget recommends $16 million, a 17.6 percent increase over current year, for cultural and historical projects.

SMALLER, MORE EFFICIENT GOVERNMENT:

• Living Within Our Means: Governor Bush and Lt. Governor Jennings believe government should not grow more than the people's ability to pay for it. For the past six years, state spending has grown no faster than personal income growth, and the Fiscal Year 2004-2005 Executive Budget recommendations continue this important trend of fiscal discipline. Governor Bush and Lt. Governor Jennings call for limiting government growth to 2.6 percent and providing $139 million in new tax relief. Through this philosophy, Florida's economy will continue to grow, resulting in increased revenues to the state.

• Tax Relief: Governor Bush and the Florida Legislature have aggressively rolled back the tax increases of the 1990s. With the Governor's FY 04-05 recommended budget, Floridians will have realized more than $8.2 billion in tax relief over six years. The Bush/Jennings budget provides a $48 million sales tax holiday, which includes sales tax exemptions for clothing, books and school supplies. The Governor also recommends $91 million for the Seniors and Savers tax cut, which would begin the first of the three-year phase out of the so-called intangibles tax.

• Budget Reserves: Budgetary reserves have more than doubled since FY 1998-99, growing from $1.3 billion to just under $3.0 billion in FY 2004-05. Of the $3 billion in current reserves, $999 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 $194 million.