TALLAHASSEE — Facing a $5 billion reduction in estimates of state revenue, Senate President Wilton Simpson warned Tuesday that austerity measures — including potentially the first public university tuition increases in a decade — are on the horizon.
Simpson’s comments came as the Trilby Republican took up the mantle as leader of the Florida Senate during an organization session, in which newly elected lawmakers were sworn in and House and Senate leaders officially took the helm.
Tuesday’s largely ceremonial session lacked much of the pageantry of previous years, with the Capitol building closed to the general public as COVID-19 cases continue to climb throughout the state.
Financial fallout from the pandemic will dominate the regular 2021 legislative session, which starts March 2, Simpson and his counterpart, House Speaker Chris Sprowls, R-Palm Harbor, noted Tuesday.
State economists in August lowered an estimate of general revenue for this fiscal year by $3.42 billion and an estimate for the 2021-2022 fiscal year by nearly $2 billion. General revenue, which includes such money as sales taxes and corporate income taxes, play a vital role in funding schools, health care and prisons.
“We will tighten our belts,” Simpson, a farmer and contractor who also made his fortune in the asbestos remediation industry, told senators after being sworn in as president. “We have less revenue, therefore we will have less government.”
Speaking to reporters later in the day, Simpson said entities receiving state funding will have to defend their budgets when lawmakers begin to craft an annual spending plan.
Simpson floated the possibility of slashing funding for the state’s K-12 system, pointing to increases in public-school spending over the past dozen years.
“Clearly, that is a place where we spent a lot of resources when we had times of plenty. And now that we’re in times of lean, that’s something we’re going to have to look at,” he said.
But Florida Education Association President Andrew Spar said public-school funding was slashed during the recession that hit the state hard in 2008. While a significant amount of the cuts have been restored, public schools still lag behind pre-2008 base funding levels, according to Spar.
“Florida consistently ranks near the bottom of national rankings on spending for public education. We recognize that this will be a challenging budget year due to COVID-19, but our public schools should be spared any cuts. We look forward to working with the Senate president in protecting the funding for our children and their future,” Spar said in a prepared statement, when asked to respond to Simpson’s remarks.
Senate Minority Leader Gary Farmer called potential cuts to public schools troubling.
“Education remains one of the keys to prosperity and success, so I hope we can fill budgetary shortfalls without further straining our public schools or reducing the quality of education our students deserve,” Farmer, D-Lighthouse Point, told The News Service of Florida in a text message.
Students attending Florida universities, where tuition has been locked in for a decade, could also be in for a hit, Simpson said.
Tuition hikes are a “viable opportunity,” he told reporters.
According to a slide presentation last month at a state university system Board of Governors meeting, Florida’s undergraduate tuition and fees are the second lowest in the nation. Former Gov. Rick Scott made a priority of not raising tuition when he was in the governor’s office.
The state’s colleges and universities have ranked among the country’s finest for the past four years, Simpson said Tuesday
“We want to make sure that we maintain a very high level of higher education. But at the same time, we have kids that are in foster care because we don’t have resources to be able to manage that system,” said Simpson, who has made improvements to the state’s foster-care system one of his chief priorities.
“When you start putting priorities together, I’m going to have a higher priority to make sure we’re taking care of those most- vulnerable children. And we haven’t raised tuitions in this state for 10 years. Our product, by any scale comparable, is a fraction, in most cases, of other states, and it’s something we’re going to look at,” he added.
The state’s higher-education system may be facing an even broader overhaul, if Sprowls has his way.
Speaking to House members Tuesday, Sprowls sketched out plans that include changing university funding to “reward” schools that enroll students in programs that are tied to high-demand occupations or that “require an exceptional degree of intellectual rigor.”
Sprowls also laid out a proposal that would provide a tuition discount for students who enroll in courses linked to high-demand jobs.
“We shouldn’t be subsidizing, as taxpayers, every degree, to the same degree,” he told reporters Tuesday afternoon. “I think we need to figure out what it is that is important for our state, what pushes us forward economically speaking, and there should be an incentive for universities to want students to be in those degrees. And not all of those degrees should be funded at the same level.”
With Simpson and Sprowls agreeing that budget cuts loom, the Senate leader suggested that the state has at least two ways to generate revenue — an elusive gambling deal with the Seminole Tribe of Florida and the collection of sales taxes on all online purchases — without imposing new taxes or fees.
“Those two sources would be pretty significant sources of revenue,” Simpson told reporters.
The Seminole Tribe last year made good on threats and quit a long-standing revenue-sharing agreement, which dropped at least $350 million into state coffers annually, after the demise of a potential deal they had reached with Simpson. Gov. Ron DeSantis rejected the agreement, known as a “compact,” at the close of the 2019 legislative session, saying he needed more time to scrutinize the proposal.
Talks with the Seminoles went nowhere this year, but Simpson is keen to capitalize on the amicable relationship he developed with tribal leaders during last year’s talks to pump up state revenues.
Simpson also wants lawmakers to consider legislation aimed at capturing sales taxes that often go uncollected on online purchases. Similar efforts, dubbed “Wayfair” bills after the online purveyor, previously have foundered among Florida Republican lawmakers leery of appearing to raise taxes.
“We use the honor system to collect those taxes,” the Senate president said, as brick-and-mortar stores and in-state online retailers submit sales taxes, while many out-of-state online retailers do not. “And I can assure you the honor system does not work very well. So it’s not a tax increase to pay the taxes you owe.”
Simpson took over as the head of the chamber with a GOP majority of 24-16, bolstered by the pick-up of an additional seat in the Nov. 3 election.
Farmer, who was elected leader of the Democratic caucus on Monday, said during Tuesday’s floor session that lawmakers are facing unprecedented challenges.
“Old problems have been exacerbated. New problems have come to the surface or become more pronounced. So, we certainly have our work cut out for us,” Farmer said.