Government Watchdog Finds $1 Billion In Savings For Florida Taxpayers

Nov 6, 2013

Florida Taxwatch has come up with suggested cost savings for the state for the last five years. Lawmakers and the governor have acted on $4.2 billion in recommended savings so far.
Credit Jordan Michael/WLRN

Florida TaxWatch, a nonprofit government watchdog group, is out with its annual list of ways the state can cut costs and be more efficient -- without cutting services.

The report, called Modern Management & Sensible Savings, found $1.2 billion that could potentially be returned to state coffers. Lawmakers could act on the recommendations when they convene for the annual legislative session next spring.

"Each recommendation contains a solution that our state's elected leaders can act upon to help the Sunshine State better serve its customers, who are ultimately Florida taxpayers," said Florida TaxWatch president and CEO Dominic Calabro. "This will help improve the bond rating long-term, which will save us more money. It will also allow us to provide tax cuts but also fully fund education."

The report highlights six recommendations:

Replace the Florida Accounting Information Resource (FLAIR) with a modern accounting and financial reporting system. FLAIR is antiquated.

"It's 30-years-old, has an IT language that no one knows anymore, and we're being faced with state employees who've worked in it for 30 years and they're about to retire," said John Alexander, chairman of the TaxWatch Center for Government Efficiency.  Modernizing the system could yield at least $350 million in savings each year.

Create an agency to set and manage information technology (IT) policy, improve procurement practices across agencies, and optimize management of state assets.  The state conducts operations and provides services through numerous agencies and governmental entities. Often these operations require collaborative efforts and strategic coordination. Addressing these operations as an enterprise-wide initiative -- a think tank type of agency -- could improve services and reduce costs by $70 million a year.

Enroll all new Florida Retirement System members in the Defined Contribution Investment Plan.  This action would better align government benefits with those provided by the private sector, reducing the state’s financial liability and generating significant savings in the long run. Florida would save over $10 million in the first two years and increase savings thereafter.

Reform the criminal justice system. The report recommends using diversion programs for non-violent offenders. "We need more programs that don't put, for example, non-violent offenders into prison," Alexander said. It also recommends providing education, vocational training, and faith- and character-based programs for inmates; and employing reentry and work release programs. Savings could reach $131 million a year.

Improve health insurance system for state employees. The Legislature should convert the State Group Insurance Program to a defined-contribution health model, audit the program to determine eligibility and coverage of dependents; increase the coverage categories offered; increase emergency room co-pays; and implement an Employee Group Wellness Program. These and other changes could bring an estimated savings of $423 million a year.

Maximize existing revenue sources. Florida has one of the lowest tax rates in the country and should ensure that targeted revenue is collected. The state should take steps to collect sales tax from online purchases, conduct audits to ensure compliance with tax law; and draw down all available federal dollars. That equals approximately $220 million in found money.

TaxWatch says the recommendations could help offset the cost of a $500 million tax cut being considered by Florida lawmakers.

“It is crucial that reforms are made to increase efficiency and reduce spending to ensure that Florida faces an economically stable future," said John B. Zumwalt, III, Florida TaxWatch chairman. "It is our hope that the Legislature considers these recommendations while they determine how to spend Floridians' hard-earned dollars in 2014."

Over the last five years, TaxWatch says the Florida Legislature and governor have approved its savings recommendations totaling $4.2 billion.