Gov. Scott's budget calls for fewer state workers and more tax cuts

• Proposal is a one percent increase over current budget
• Eliminates 1,368 positions at state agencies
• Dept. of Health would lose 718 positions and Dept. of Corrections would add 472
• Rep. Mark Pafford calls tax cuts for businesses and property tax increase for homeowners, "disgusting."

Gov. Rick Scott Monday released a $79 billion budget recommendation that calls for the elimination 1,368 state jobs, no pay raises for state employees and $1 billion in tax cuts for businesses.

With a recommended addition of 504 new positions — mainly within the Department of Corrections — Scott's plan would result in a net decrease of 864 positions.

The proposal is line with Scott's governing philosophy to cut taxes and reduce the size of government. The state health department will see further cuts, while more corrections officers will be hired. Scott offered state employees one concession: $1,500 merit bonuses.

The 2016-2017 proposal earmarks $125 million for one-time merit bonuses for state workers for meeting goals.  The state’s 112,284 employees, the smallest number for a state the size of Florida, have received two across the board pay raises in the past decade, 2013 and 2006.

“State employees have not had an increase in, really, eight years,” said Sen. Bill Montford, D-Tallahassee. “There was one small increase about three years ago, just after we started taking 3-percent of their salaries for pensions, so the buying power of state workers has decreased every year.”

The proposed $79.3 billion spending plan represents a 1 percent increase above the current state budget — $78.4 billion. Scott said the tax cuts were affordable because the state expects $1.3 billion in additional revenue compared to the current year. When asked about not including a pay increase in his proposal, Scott said he provided a bonus plan for agencies meeting their goals.

“We must continue to focus on how to make government more efficient,” said Scott. “The right thing to do is in my budget.”

An employee whose agency performs well and whose personal contribution is valued highly could receive up to $1,500 in a non-recurring bonus. That money will not boost employees pensions. Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee, expressed concern about unintended favoritism in handing out the bonuses and deserving workers not being recognized.

“I agree with the governor about smaller, more efficient government, but we have an obligation to treat our employees fairly,” said Rehwinkel Vasilinda.

Florida lawmakers will use Scott’s proposal as a starting point for writing a state spending plan when they meet in session in January.  Rep. Alan Williams, D-Tallahassee, said he was not surprised by how state employees fared in Scott’s budget proposal. He has begun lobbying House Speaker Steve Crisafulli, R-Merritt Island, and Appropriations Chair Richard Corcoran, R-Land O’Lakes, to find money to hike state pay.

“We will have a say in this conversation,” Williams said. “The state wants mental health reform, to improve the child-welfare system, to grow the state university and state college system – and we can’t do that without recruiting the best and brightest employees.”

The absence of a pay raise for state employees, a key sector of his constituents, rankles, Williams.

“It’s unfathomable to think we have an $80 billion budget and can’t afford $200 million or $300 million for a pay raise,” said Williams.

Since taking office in 2011, Scott has reduced the state workforce by 9.6 percent.  Montford noted that year after year, Florida ranks dead last in its ratio of population to state employees and has the lowest per-capita cost of state personnel.

“What this means is that our employees are working their butts off,” said Montford. “We’ve lost sight of their importance to this state. If we didn’t have the quality of employees that Florida has, we couldn’t be doing all the other things the governor wants.”

The Department of Health is the big loser in the latest round of cuts; 718 positions would be eliminated. Most of those jobs were made unnecessary when Children Medical Services moved to a managed care plan. The governor’s office said 78 percent of the positions targeted will be vacant by July 1, 2016.

The Department of Corrections workforce would be boosted by the hiring of 472 correctional officers. The Guardian Ad Litem program would add 19 positions under Scott’s proposal.

The spending plan includes $507 million more for public schools, raising per-pupil spending to its highest level, but 84 percent of the increase will come from local property taxes. The state-mandated property tax rate will remain the same — known as the required local effort — but because property values increased, taxpayers will see a higher bill.

“The Governor and Legislature have the ability to ease that burden,” said House Democratic Leader Mark Pafford, D-West Palm Beach. “Instead they are taking those tax dollars from hard working people and giving it back to corporations and rich people. It’s disgusting.”

Scott unveiled his proposed budget, not in Tallahassee, where the bulk of state employees live and work, but at a Jacksonville factory to highlight his business-friendly tax cuts. He wants to eliminate the income and sales taxes manufacturers pay, costing state coffers about $770 million annually.

“Gov. Scott’s commitment to protecting the manufacturing machinery and equipment sales tax exemption will help Florida secure the nation’s best destination for businesses,” said Domenic Calabro of Florida Taxwatch, a nonpartisan group that monitors the government’s performance. “Florida’s manufacturing sector is vital to diversity and strengthen the state economy and provides high-wage jobs and a stable income stream.”

Other tax cuts in Scott’s plan would lower the commercial lease tax, extend an exemption on college textbooks and include a 10-day back-to-school sales tax holiday and 9-day hurricane readiness sales tax holiday.

Scott also wants to spend $250 million on an Enterprise Florida fund to provide incentives to entice businesses to expand or move to Florida. The proposal was quickly endorsed by Associated Industries of Florida. The leader of the business group called on the Legislature to work with Scott to establish the fund.

“It will allow Florida to close on top corporate development opportunities confidentially with a process accountable to Florida taxpayers,” said Tom Feeney, CEO of Associated Industries of Florida.

It is the Legislature's job to write the state budget, subject to the governor's line-item veto. The Legislature will begin developing next year’s budget when the regular session begins in January.

Budget Highlights

$1 billion in tax cuts

$770  million cut by eliminating income tax on manufacturing and retail

$76.9 million cut by eliminating the tax on manufacturing machinery and equipment

$339 million over two years by cutting tax on commercial leases

$46 million by extending sales tax exemption on text books

$ 72.8 million with back-to-school and hurricane-preparedness sales tax holidays

More money for schools

$ 20.2 billion for K-12 public schools

$507 million increase in public school funding

$427 million local property tax increase to fund public schools

$4.6 billion for State University System

$2 billion for Florida College System

Fewer state employees and a bonus plan in place of an across-the-board raise

$120 million for merit bonuses for state employees at agencies which meet their goals

864, number of positions in state government that would be eliminated

Jeff Burlew and Bill Cotterell contributed to this report. Contact James Call at jcall@tallahassee.com and follow on Twitter @CallTallahassee.