Senate panel diverts low-cost housing funds

TALLAHASSEE — A proposal that would permanently divert at least $194 million annually in real estate-related taxes from Florida’s affordable housing program to general state spending won approval Friday from the Senate Budget Committee.

The panel also voted to slash health care spending for transplant recipients and other “medically needy” patients with catastrophic illness but who lack sufficient insurance coverage.

Those were among several cost-cutting bills the committee approved that would conform state law to a $69.8 billion budget the panel approved Thursday for the fiscal year beginning July 1.

That sets the stage for floor action in both legislative chambers, which will be followed by negotiations to settle differences in their respective appropriations bills.

Builders, real estate brokers and advocates for low-income people told lawmakers they aren’t against shifting documentary stamp taxes levied on mortgages and other transactions from the affordable housing program for one year to help the state overcome an impending $3.75 billion shortfall.

They argued, though, there’s no need to make that diversion permanent because the state’s economy is sure to rebound.

“You would be making a decision that would be forever,” said Jaimie Ross, president of the Florida Housing Coalition.

Committee Chairman JD Alexander responded that overbuilding is a big part of Florida’s economic problems and he couldn’t envision a need for those funds for at least five more years because the program also gets $1.6 billion annually from the federal government and other sources.

The Lake Wales Republican said shifting the affordable housing money into the general state treasury also may enable the Legislature to reduce some of the cuts planned for other parts of the budget, including health care and a de facto public employee pay cut.

Budget bills that have cleared committees in both chambers would reduce the salaries of teachers, state workers and many local government employees by requiring them to pay 3 percent of their wages into the Florida Retirement System, now fully supported by taxpayers.

The medically needy cutback would stop covering prescription drugs, transportation, hearing aids and glasses effective a year from now, but it would continue paying doctor bills.

Most Republicans and all but one Democrat voted for the cut.

Senate Democratic Leader Nan Rich of Weston said the measure would “literally sentence people to death.”
Sen. John Thrasher, a St. Augustine Republican and former state GOP chairman, disputed Rich’s statement and complained she hadn’t made suggestions to cut other spending or raise more money for the state.

Rich responded that she had filed a bill to close corporate tax loopholes but leaders of the Republican-controlled Legislature have refused to consider it.

The committee also voted to take more money from state employees’ pockets by approving a plan offered by Alexander that would increase their health insurance contributions in many cases.

Alexander estimated it would cost employees up to $50 more a month if they choose a health care plan costing more than the cheapest of six choices the state offers. That’s expected to save the state up to $130 million a year.

The bill originally would have increased each employee’s costs by up to $8,000 a year by capping the state’s contribution at $6,000, but the panel approved Alexander’s much more modest substitute proposal.
State employee Jennifer Morgan-Byrd told the committee she couldn’t have afforded the original proposal because she makes under $40,000 in the Department of Legal Affairs and is her family’s sole financial supporter because her husband stays hope with their autistic children.

“It would have been draconian,” Alexander told her. “I apologize for scaring you to death.”Alexander said the original proposal resulted from bill drafters misunderstanding his intent.

The committee split largely along party lines to approve the removal of drug abuse prevention and children’s advocacy functions from the governor’s office as requested by its new occupant, Republican Gov. Rick Scott.
The Office of Drug Control would go to the Florida Department of Law Enforcement and the Florida Children’s Cabinet would move to the Department of Children and Families.

Sen. Mike Fasano, a New Port Richey Republican who crossed party lines to oppose the drug office shift, complained that FDLE wouldn’t get any money to pay for it. He acknowledged the futility of his opposition, though, by noting Scott already has fired the drug office’s four employees.

Rich said the Children’s Cabinet’s has successfully used the influence of the governor’s office’s to coordinate activities of different agencies affecting children and is considered a national model.
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