Florida Governor Rick Scott Proposes 2012 Budget With $5 Billion in Cuts
Florida Governor Rick Scott proposed a 2012 budget that would lower spending by $4.6 billion, or about 7 percent, the most since at least 2002, as it eliminates almost 8,700 jobs.
The budget would require public employees to contribute 5 percent of their wages to pensions, pare Medicaid spending by almost $4 billion over two years and renegotiate contracts and leases to save more than $660 million over two years.
The first-term Republican elected in November faced a projected deficit of $3.6 billion and campaigned on a promise to fill the gap with spending reductions while still cutting taxes. He told a Tea Party rally today that reviewing the budget was like “going through the attic in an old home.”
“You come across some priceless things you need to protect, but there are a lot of odd things someone once thought we needed,” Scott, 58, said at a church in the central Florida city of Eustis. “Much of it we’ve outgrown. And it just doesn’t fit anymore.”
The budget cuts 8,681 jobs, or almost 7 percent of the state workforce. Reductions are concentrated in children and family-services, which would lose 1,849 positions, and corrections, which would shrink by 1,690.
The state would save $2.8 billion over two years by requiring public-sector employees to contribute 5 percent of their wages to their pensions, the budget says. Florida is one of five states -- including Utah, Connecticut, Tennessee and Oregon -- where employees don’t contribute to their pensions.
Bearing the Cost
“We cannot ask Florida taxpayers, most of whom have no pension at all, to bear all the costs of pensions for government employees,” Scott said.
Scott’s budget lowers the business-income tax rate to 3 percent from 5.5 percent. It would also cut property taxes by $1.4 billion over the next two years. Combined, the moves would cost the state about $4 billion over two years, Scott said.
The spending plan now faces the Florida Legislature, where both houses are controlled by Republicans.
The budget “reflects our common goal” of closing the deficit without raising taxes, Representative Denise Grimsley, chairwoman of the House Appropriations Committee, said in a statement. Lawmakers, who have promised they won’t raise taxes, haven’t committed to tax cuts like Scott did today.
In 2002, the state trimmed $3.7 billion, or 7.1 percent, from its budget, according to the Legislature’s research office.
To contact the reporter on this story: Simone Baribeau in Miami at sbaribeau@bloomberg.net.
To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.
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