Crist To Throw Reserves At $1.5 Billion Budget Hole

Aug 20, 2008


Tampa Tribune

TALLAHASSEE - Gov. Charlie Crist said Tuesday that he plans to take at least $600 million from state reserves to plug part of the $1.5 billion budget hole expected this year. But he's not interested, he said, in bringing lawmakers back to the capital for a special session to prioritize cuts to state spending.

Lawmakers authorized Crist last spring to take up to $1.67 billion from state reserves - $1 billion from the Lawton Chiles Endowment Fund for health and related programs, plus one-half of the $1.34 billion budget stabilization fund - if revenue falls too far south this fiscal year. Last week, state analysts projected a $1.8 billion shortfall, triggering Crist's emergency authority to dig into the two reserve pots.

That translates to a budget hole of about $1.5 billion, factoring in the $326 million that lawmakers left unspent in the $66 billion budget to offset unforeseen needs. Crist said he plans to use "just north of $600 million" from state reserves to narrow the gap. He is not making immediate plans, he said, to plug the entire hole, which he noted is only a projection.

"It's not a fact, and I have to deal with facts," he said. "I don't want to lurch ahead and use the totality of the reserve based on an estimate only."

State economists will revise their estimate in November. To date, every general revenue estimate they have released since the end of the 2007 legislative session has been more dire than the last. Crist said he is not making any assumptions about the next round of figures.

It is "not unlikely," Crist said, that he and lawmakers will allow 4 percent spending "holdbacks" for state agencies to become permanent budget cuts this year. Crist ordered the holdbacks, worth as much as $1 billion, in June.

The specter of such cuts worries advocates for the poor and disabled.

"What else are we going to cut?" asked John Hall, director of the Florida Center for Fiscal and Economic Policy and former head of the Arc of Florida, a developmental disability advocacy group. "We have wait lists for services of tens of thousands of people with developmental disabilities, people who need subsidized child care, people who need substance abuse services."

A 4 percent blunt cut is "totally inappropriate," Chief Financial Officer Alex Sink said Tuesday, adding that some areas such as law enforcement probably can't stand more cuts beyond the $6 billion that lawmakers shaved over the past year from total state spending.

"We're past belt-tightening; let's face it," said Sink, the lone Democrat in the state Cabinet. "Rather than do another 4 percent cut, we need to be more surgical about where the cuts are."

Sink backed outgoing House Minority Leader Dan Gelber's call for a special session. Lawmakers should return to the capital for budget-cutting after the election but no later than mid-December, Sink said.

Crist, however, stood with House Speaker-designate Ray Sansom, who said last week that a special session will not be necessary. Crist said the Republican-led Legislature had delegated authority to him to dig into reserves to avoid such a session, "and I think it was very smart of them to do so."

Sink noted that although the net loss to the budget may technically be $1.5 billion, that presupposes that Florida will spend its entire $326 million budget "cushion" to help plug the hole.

"You don't want to scrape the bottom of the barrel that much," she said. "For a state that has a $66 billion budget, $300 million in working capital is very, very thin. We wouldn't want to go there."

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