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Legislative Budget Commission LEGISLATIVE BUDGET COMMISSION Richard Corcoran, Chair Tom Lee, Vice-Chair MEETING PACKET Tuesday, September 15, 2015 3:00 PM 212 Knott Building (Please bring this packet to the committee meeting. Duplicate materials will not be available.) LEGISLATIVE BUDGET COMMISSION AGENDA Tuesday, September 15, 2015 3:00 PM 212 Knott Building Members Senator Oscar Braynon Representative Richard Corcoran Senator Bill Galvano Representatives Janet Cruz Senator Rene Garcia Representatives Erik Fresen Senator Denise Grimsley Representatives Matt Hudson Senator Arthenia Joyner Representatives Clay Ingram Senator Tom Lee Representatives Larry Metz Senator David Simmons Representatives Alan Williams Page # I. Presentation of Draft Long-Range Financial Outlook by Amy Baker, 1 Coordinator, Office of Economic and Demographic Research II. Public Testimony on the Draft Long-Range Financial Outlook III. Consideration of the Long-Range Financial Outlook IV. Consideration of the following budget amendments: A. Agency for Persons with Disabilities EOG #B2016-0086 117 B. Department of Children and Families EOG #B2016-0114 120 C. Department of Veterans Affairs EOG #B2016-0084 123 D. Agency for Health Care Administration EOG #B2016-0127 127 E. Department of Economic Opportunity EOG #O2016-0053 139 F. Department of Financial Services EOG #B2016-0094 140 EOG #B2016-0112 143 G. Department of Transportation EOG #W2016-0024 146 H. Department of Law Enforcement EOG #B2016-0125 153 II. Other Business Clerk of Courts Budget Request as of 8/26/14 Draft Fall 2015 Report As Submitted to the Legislative Budget Commission 9/8/2015 0 | P a g e Table of Contents The Outlook: Production and Development ................................................................................................ 3 Summary and Findings .................................................................................................................................. 7 Tier 1 Table – Critical Needs ....................................................................................................................... 16 Tier 2 Table – Critical Needs and Other High Priority Needs ...................................................................... 17 Tier 3 Table – Critical Needs, Other High Priority Needs, and Revenue Adjustments ................................ 18 Significant Risks to the Forecast ................................................................................................................. 20 Potential Constitutional Issues ................................................................................................................... 28 Florida Demographic Projections ................................................................................................................ 39 Revenue Projections ................................................................................................................................... 49 General Revenue Fund ............................................................................................................................ 49 Major Trust Funds ................................................................................................................................... 57 Other Revenue Sources that Primarily Support Education ..................................................................... 62 Florida Debt Analysis ................................................................................................................................... 68 Planned Expenditures from Estimated Funds ............................................................................................. 72 Key Budget Driver Worksheet ..................................................................................................................... 73 Key Budget Drivers ...................................................................................................................................... 75 Critical Needs .......................................................................................................................................... 75 Pre K-12 Education (Drivers #1 - #4) ................................................................................................... 75 Higher Education (Drivers #5 & #6) ..................................................................................................... 79 Human Services (Drivers #7 - #11) ...................................................................................................... 80 Criminal Justice (Driver #12) ............................................................................................................... 86 Transportation and Economic Development (Driver #13)................................................................... 87 General Government (Drivers #14 & #15) ........................................................................................... 88 Administered Funds and Statewide Issues (Drivers #16 - #19) ........................................................... 89 Other High Priority Needs ....................................................................................................................... 91 Pre K-12 Education (Drivers #20 & #21) .............................................................................................. 91 Higher Education (Drivers #22 - #25) .................................................................................................. 92 Human Services (Drivers #26 - #31) .................................................................................................... 94 Criminal Justice (Drivers #32 - #34) ..................................................................................................... 96 1 | P a g e Judicial Branch (Drivers #35 & #36) .................................................................................................... 97 Transportation and Economic Development (Drivers #37 - #40) ........................................................ 97 Natural Resources (Drivers #41 & #42) ............................................................................................. 101 General Government (Drivers #43 & #44) ......................................................................................... 108 Administered Funds & Statewide Issues (Driver #45 & #46) ............................................................. 109 Tier 3 Adjustments to the General Revenue Fund.................................................................................... 112 Key Revenue Adjustments to the General Revenue Fund Worksheet ..................................................... 113 Key Revenue Adjustments to the General Revenue Fund ........................................................................ 114 Tax and Significant Fee Reductions ................................................................................................... 114 Trust Fund Transfers (GAA) ............................................................................................................... 115 2 | P a g e Long-Range Financial Outlook The Outlook: Production and Development What is the Outlook? In 2006, Florida voters adopted a constitutional amendment that requires the development of a Long-Range Financial Outlook, setting out recommended fiscal strategies for the state and its departments in order to assist the Legislature in making budget decisions. The Legislative Budget Commission is required to issue the Outlook by September 15th of each year. The 2015 Outlook is the ninth document developed in accordance with the provisions of Article III, Section 19(c)(1) of the Florida Constitution. Ultimately, the Outlook is a tool that provides an opportunity to both avoid future budget problems and maintain financial stability between state fiscal years. The Outlook accomplishes this by providing a longer-range picture of the state’s fiscal position that integrates projections of the major programs driving Florida’s annual budget requirements with the revenue estimates. In this regard, the budget projections primarily reflect current-law spending requirements. The Outlook does not purport to predict the overall funding levels of future state budgets or the final amount of funds to be allocated to the respective budget areas. This is because very few assumptions are made regarding future legislative policy decisions on discretionary spending, making this document simply a reasonable baseline. Estimated revenues and tax provisions are generally treated in the same way; however, a new section has been added this year that shows the effects of continuing to make revenue adjustments similar in scope to those that have been made over the past three years. The Outlook also includes economic, demographic, and debt analyses to provide a framework for the financial projections and covers the upcoming three fiscal years: in this version, 2016-17, 2017-18, and 2018-19. It does this by using anticipated revenues and expenditures in the current year (2015-16) as the baseline. Within each table, all funds remaining after the budget drivers and other key issues are fully funded for each year are carried forward into the following fiscal year. Who produced it? The Outlook was developed jointly by the Senate Committee on Appropriations, the House Appropriations Committee, and the Legislative Office of Economic and Demographic Research. How was the Outlook developed? All major programs that have historically driven significant increases in the state’s
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