Florida budget has plenty of pain to go around
Special education teacher Hal Krantz hasn't had a raise in two years, but he'll be among 650,000 public employees whose pay checks will be cut to help balance an annual state budget that also slashes spending by nearly $4 billion.
The $69.7 billion budget was set for final votes in the House and Senate late Friday to close out Florida's annual legislative session. Passage was virtually assured. Both chambers have overwhelming Republican majorities, and GOP leaders kept their pledge not to raise taxes although they found other ways to balance the budget that would go into effect July 1.
It will save more than $1 billion for the state and local governments by requiring public employees such as Krantz to contribute 3 percent of their pay to the Florida Retirement System, now fully funded by taxpayers.
"Every expense I have has been going up, except my salary, so it's going to be a hardship for me and every other teacher out there," said Krantz, who teaches at Coral Springs Middle School in Broward County. "You're going to have a lot of teachers that are going to be looking for second jobs."
That's assuming they still have their first jobs.
The budget eliminates nearly 4,500 state positions although about 2,000 are vacant while 1,700 jobs are in prisons slated to be privatized. School districts also are anticipating layoffs and furloughs due to state spending cuts.
Some private sector employees who depend on state funding, such as road builders and nursing home workers, also may get the ax.
There's also fiscal pain ahead for college and university students who will be paying higher tuition, and many will see their state-funded scholarships cut.
Public school classrooms will become more crowded.
Hospitals and nursing homes will take a reduction in Medicaid payments.
Everglades restoration spending will be cut and funding eliminated for the Florida Forever environmental land buying program.
"Although this has to be one of the most difficult budgets in the history of Florida, I think it's one that most of can go home and feel like it's a workable budget," said Senate Budget Chairman JD Alexander, R-Lake Wales.
Yet, lawmakers found enough money to cut taxes by $308 million -- mostly at the expense of water management districts -- and pay for dozens of their pet projects. Those include college and university buildings, a rowing facility in Sarasota and a $400,000 study of House Speaker Dean Cannon's proposal to expand the Florida Supreme Court. The budget also maintains $2.28 billion in reserve funds.
Requiring teachers, state workers and many local government employees, including police and firefighters, to make retirement contributions was one of Gov. Rick Scott's top priorities although he had proposed bigger contributions of 5 percent Scott said it's only fair for public employees to contribute because most workers in other states and the private sector must do so.
Public employee unions opposed that move. They say employees gave up pay raises decades ago in exchange for full public funding of the plan. Also, state workers now are going into a fifth straight year without an across-the-board pay raise. Democratic lawmakers derided the contribution requirement as an "income tax."
School employees make up the biggest segment of the retirement system.
"Either way you look at it it's a pay cut," said Jennifer Smith, a French teacher at Hialeah High School near Miami. "It doesn't sound like a lot, but that's the little bit that lets me go out to eat sometimes. That's going to impact not only us and our quality of life but the economy."
Like Republican legislators and governors across the nation these double-talking conservatives have convinced voters the problem is runaway spending. Sure there is usually a few dollars that can be saved here and there, but the main reason for state budget short-falls is because of conservative Republican economic policies that lost the country trillions of dollars in wealth, The Consequences of Conservatism - Loss of Wealth Stunning During Great Recession
The Great Recession was so great not just because of very sharp unemployment increases but also due to an unprecedented decline in wealth—as the Federal Reserve detailed in a report released this week. That wealth destruction is key to understanding the Great Recession since massive house price drops led to a foreclosure crisis that then fueled massive layoffs. Much of the unprecedented wealth destruction in 2007 and 2008 can be traced back to failed economic policies under President George W. Bush, when opportunities to put the economy and the labor market on the right track were ignored.
Incoming President Barack Obama’s hand was thus forced to first pass the American Recovery and Reinvestment Act of 2009 to save the economy from sliding deeper into an economic hole amid rising job losses, and to then tackle the problems that had been ailing the economy and American families—low incomes and rapidly rising prices for health care and energy—for the previous eight years.
Wealth destruction probably doesn’t adequately capture what happened in the early stages of the crisis. Wealth was vaporized at a breathtaking, eye-popping speed. American families lost a total of $19.4 trillion (in 2010 dollars) in household wealth from June 2007 to March 2009, when the stimulus started to take hold. First it was the housing market, and then it was the housing and the stock market together that tanked. American families lost $6.4 trillion in home value during this period.
Trillions of dollars are sometimes hard to grasp, so think of it this way: One complete house (at 2008 prices) was lost every 1.7 seconds during the Great Wealth Destruction. And this doesn’t even count what happened to American families’ rainy day funds and retirement savings.
