December 25, 2011|By Aaron Deslatte Tallahassee Bureau Chief TALLAHASSEE -
Throughout the recession and economic hangover, Florida social-services advocates have warned that budget woes could unravel the safety net that supports millions of low-income families, seniors trying to stay in their homes, and people with debilitating illnesses or disabilities. But entering Florida’s fifth year of billion-dollar budget shortfalls, the state’s core social services - from medical care to drug treatment to organ transplants - have proven remarkably resilient to cuts, thanks largely to billions of dollars routed to Florida by the 2009 federal stimulus act. But now that cushion is running out. And much of the give-and-take over how to balance Florida’s budget in the coming months will revolve around whether to replace stimulus cash - or cut services to the poor, sick and elderly by hundreds of millions of dollars. “It wasn’t intended to last forever, and it was intended to give states some breathing room,” said Don Winstead, who oversaw Florida’s stimulus spending for two years under then-Gov. Charlie Crist. “I think it certainly succeeded,” he said. Though Florida’s overall budget has declined from a high of $73.5 billion in 2007 to $69.1 billion this year, the numbers for safety-net programs have not: •Florida’s state-federal Medicaid health-care program has grown by more than 1 million people since mid-2007 and is on pace to cover more than 3.3 million people next year. •The number of food-stamp recipients has grown from just under 1.3 million in mid-2007 to 3.3 million last month. •Seniors enrolled in support programs that make home repairs, deliver meals and provide in-home health-care have held flat at about 120,000, though the waiting list has nearly doubled to 43,600. •Enrollment in disability programs for autism, cerebral palsy, and other intellectual and motor disabilities has dipped, but only slightly, from 31,200 four years ago to 29,594 this month. However, the waiting list has grown from 15,273 people to 20,891. Likewise, the numbers of Floridians getting temporary cash assistance, substance-abuse treatment and other benefits have swelled despite four years of dwindling state revenues. “On the macro level, we’ve dealt with the budget just like families and businesses. Our goal has been to prioritize people over things, and essentials over non-essentials,” said House Speaker Dean Cannon, R-Winter Park. To do that, the conservative Republican Legislature has leaned on the federal government. Florida was one of the biggest beneficiaries of the $787 billion stimulus bill that Congress and President Barack Obama enacted in 2009. Through last September, $20.1 billion of the $24.6 billion the state will receive had been spent. The money helped shore up state and local government budgets, mitigating layoffs and freeing up dollars that have enabled lawmakers to minimize the pain to schools and social services. For example, the stimulus bill increased the fed’s share of Medicaid - which covers the poor, sick and elderly - from about 55 percent to 63 percent. That allowed Florida’s budget-writers to shift state funds to other areas of the budget. Spending on health care, unemployment benefits and higher allotments for food stamps makes up the largest share of Florida’s stimulus spending - $12.3 billion of the $20.1 billion allocated so far. But now that the federal aid is drying up, lawmakers face the quandary of re-engineering Florida’s budget to keep the services in place. Florida’s estimated 2012 budget shortfall is anywhere between $1.2 billion and $1.9 billion - at least half stemming from continued growth in entitlement programs and loss of stimulus funds. Even Gov. Rick Scott, a vociferous critic of the federal stimulus, has proposed to replace about $500 million in stimulus money for schools with general revenue dollars - part of his $1 billion school funding increase. That’s an about-face from when he first took office. “What doesn’t make any sense is for the federal government to say, ‘Here’s some dollars, let me get you hooked on those dollars,’ and then yank them away,” Scott said in a recent interview. Senate Budget Chairman J.D. Alexander, R-Lake Wales, has said he feels obliged to replace the schools money in his chamber’s budget, too. Cannon, though, may balk. “Philosophically, I’m not comfortable relying on federal stimulus dollars or trying to replace federal stimulus dollars at all,” he said. Still, that’s precisely what lawmakers did in recent years. “I just think people need to be honest about why we got into this situation: because we used stimulus money in the budget,” said Senate Democratic Leader Nan Rich, D-Weston. She had urged raising tax revenues to cover some of the costs. The biggest issue for lawmakers may be Medicaid, which is projected to enroll more than 3.3 million people and cost $21.5 billion next year. It has grown roughly 50 percent since 2007. But while health-care spending far outstripped growth in education, transportation and economic development, lawmakers have tried to control costs by cutting payments to providers rather than inflict pain on the poor people the program serves. Rates paid hospitals for care they provide have been cut seven times since 2005 - for a cumulative loss to hospitals of $966 million. More than half that - $494.8 million - was imposed last spring, when lawmakers slashed inpatient and outpatient rates by 12.5 percent. To balance the budget next year, Scott has proposed even deeper cuts on reimbursement rates for higher-cost, urban hospitals. The Safety Net Hospital Alliance of Florida estimates the cuts would amount to nearly $1.5 billion - three times more than this year’s. And they would disproportionately smack urban hospitals with higher concentrations of poor people. Broward Health’s public hospitals could be hammered, losing $77.6 million under Scott’s plan. The Memorial Healthcare System could lose $93 million. In Central Florida, the Florida Hospital system could lose $21 million, while Orlando Health hospitals would lose $3.2 million and Orlando Regional Medical Center could lose $4.5 million. “That will be disastrous,” said Tony Carvalho, president of the alliance. “One of several bad things will have to happen: hospitals will need to lay off employees, or cost-shift these losses to the commercial side of the equation, the private insurance side,” he said. “Then you have to eliminate programs that lose money, like trauma centers, neonatal intensive-care units and burn units. There are things that safety-net hospitals provide.” The federal dollars also came with restrictions on cost-cutting that are now going away. For instance, accepting stimulus money locked the state into preserving optional programs like one called Medically Needy that pays for critical services such as organ transplants for lower-income people whose earnings exceed Medicaid eligibility levels. Enrollment has skyrocketed from 18,607 in 2007 to more than 48,100 this year. “Our friends and neighbors on Medicaid have been largely spared the effects of the budget shortfall,” said Senate health-care budget chief Joe Negron, R-Stuart. “And it’s been disproportionately shared by nursing homes, hospitals and medical providers.” Negron says he’d rather cut programs such as Medically Needy - removing, for instance, adult mental-health and dental services - than do any more damage to hospitals or state agencies. “I’m not sure there’s much left for us to save,” Negron said. “I think it’s down to where these agencies are operating as efficiently as they can.”
