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TALLAHASSEE (CBSMiami/AP) – As Florida continues to slowly pull out of the recession, state lawmakers aren’t behind a billion dollar eight ball as they try to come up with a budget.

Gov. Rick Scott and legislative leaders are already offering up dueling versions on what to do with the modest surplus that is now projected. And Senate President Don Gaetz warns that automatic budget cuts about to kick in at the federal level could send the state’s economy back into a tailspin.

“I’m not prepared to put on rose-colored glasses about the budget, and I’m certainly not prepared to talk about any extra money until we see what happens in Washington,” Gaetz said.

State economists currently project that the state’s tax collections — one sign of Florida’s economic health — will grow around 5 percent for the next two years. The latest figures show that legislators could have – including unspent money from this year – as much as $3.3 billion more in the state account that relies primarily on sales taxes.

Some of that extra money would likely go into reserves, or will be used for pressing items such as shoring up the state’s pension fund. The question is what to do with the amount that’s left over – which could be as least $700 million.

“We’re not going on a spending spree,” maintains Sen. Joe Negron, R-Stuart and the Senate budget chief. “Floridians are working very hard and our revenues are modestly up. But we have significant costs confronting us.”

Scott recently released a proposed $74.2 billion budget for the coming year that calls for higher spending on schools and universities, including an across-the-board $2,500 pay raise for school teachers and a $1,200 one-time bonus for state workers.

The governor’s budget proposal – which would be a 6 percent hike over this year’s budget – is a dramatic turnaround from the last several years. Since the recession hit, legislators have cut spending, eliminated thousands of state worker jobs, relied on federal stimulus help and even raised taxes to balance the budget.

Scott is also recommending a freeze on college and university tuition rates, while also asking for more than $100 million in tax cuts and cutting reimbursement rates for hospitals.

Both Gaetz and House Speaker Will Weatherford have expressed reservations about Scott’s teacher pay raise proposal. Instead Gaetz – who notes some teachers have gotten raises recently – has suggested that it may be time to give state workers an across-the-board pay raise since they have not had one for six years.

Other suggestions floated out by top legislators include increasing the size of the state’s budget reserves, fully restoring cuts made last year to state universities, or bolstering the pay of the state’s highway patrol troopers.

But the biggest budget battle during the session may be over Medicaid, the state’s safety net health insurance program.

There are signs that the House and Senate may go in different directions – an impasse that could prevent legislators from wrapping up their work on time. The state budget is the one bill that lawmakers are required to pass each year.

Scott recently endorsed expanding Medicaid coverage to the roughly 900,000 uninsured Floridians who make up to 138 percent of the federal poverty level. The governor wants to limit the expansion to the next three years – which is when the federal government is expected to cover 100 percent of the cost.

But the governor’s support for the idea touched off a backlash from conservatives and many Republicans because the expansion is a key element of the federal health care overhaul pushed by President Barack Obama.

A decision by lawmakers to change Medicaid – which is projected to cost $22 billion before the expansion – would send ripple effects through the rest of the budget.

Negron points out that expansion could result in savings in other parts of the state budget because the federal government would be paying to cover people who receive types of optional health care services that are now paid by state tax dollars.

Some legislators remain unconvinced, arguing that it would be hard to roll back the program even if the federal government scaled back its financial support. Additionally some Republicans are uncomfortable about providing health insurance coverage to uninsured adults who don’t have children.

“I’m very skeptical that taking an inflexible law that mandates an all or nothing Medicaid expansion for over a million Floridians is going to improve the quality of health care for the citizens of Florida,” Weatherford said.

(TM and © Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)


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