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Lawmakers Face $3.5 Billion Gap In Next Year's Budget
Aug 28, 2008
TALLAHASSEE - State lawmakers heard Wednesday that they will face a $3.5 billion hole in the state budget next year, raising concerned cries in both parties about the future of Florida's health, education and criminal justice systems.
Gov. Charlie Crist already is talking about digging into reserves to plug about one-half of the expected $1.5 billion hole in the current year's $66-billion budget. Lawmakers already have shaved $6 billion during the past year from state spending on everything from the courts to environmental conservation, based on worsening revenue forecasts. But this year's tax collections are falling well short even of those stark projections.
Wednesday, chief state economist Amy Baker told members of the joint Legislative Budget Commission that, assuming they completely fill this year's $1.5 billion shortfall, they will face a budget hole of $3.5 billion for 2009-2010. And that's just to keep existing high-priority programs going, she said, - without funding anything new.
Senators and House representatives on the panel received the news solemnly, even voicing regret about the Legislature's past spending sprees on new projects and programs when tax revenue ballooned this decade.
"We should probably not have spent the bubble that we received, and waited for rainy days," said Rudy Garcia, R-Hialeah, who chairs the joint commission. "We may not have been in the position that we are in today. But because we are, we have some difficult decisions to make."
Sen. Mike Fasano, R-New Port Richey, agreed, referring in an interview to some of those past spending decisions as "dastardly deeds."
Health care and social services should be spared the brunt of the next round of budget cuts, Fasano said, even as he acknowledged that they are extremely vulnerable in a budget crisis because they claim more than $7 billion of the state's general revenue. He expects those areas to take a hit, he said.
Schools, courts and prisons are the other biggest areas of spending for the state, making them big targets as well.
But needs for publicly funded education, health care and criminal justice go up in bad economic times, making it dangerous to hack at them now, Sen. Victor Crist said
Crist, R-Tampa, budget chief for criminal justice who is term-limited this year, said that after last year's cutbacks, it would be "nearly fatal" for courts and prisons to absorb even the 4 percent spending holdback that Gov. Crist has ordered for this year.
The governor ordered the spending holdback across all agencies, and said it's likely that he will work with the Legislature to make the cuts permanent. Doing so could plug at least $800 million of the current year's shortfall, but Sen. Crist sided with Democrats who think lawmakers should prioritize where the cuts fall.
Connie Milito, lobbyist for Hillsborough County Public Schools, said the district already is operating under the assumption that the state-ordered spending holdbacks will become permanent cuts this year. So far, she said, Hillsborough has shifted resources and personnel enough to avoid the teacher layoffs and pay cuts that are occurring in some districts.
If the cuts keep coming, she said, it will become increasingly hard to shield people and classrooms.
Democratic Rep. Ron Saunders, a former House budget chief, said cuts will not be sufficient. Legislators must consider new revenue, he said. Unpopular though taxes may be, he said, lawmakers should look at consumption-based taxes, such as increasing the cigarette tax.
"If you smoke, you pay the tax; if you don't, you don't," he said. "Cigarette smoking actually costs the state money, so it's something good to look at."
According to the American Lung Association this spring, a $1-per-pack tax increase would have raised an extra $842 million, on top of reducing health care spending by the state on smoking-related illnesses.
Fasano, who oversaw the Senate transportation and economic development budgets last session, opposes any new tax increases.
"That's just going to stop revenues from coming in, because people will buy less," he said. "We will deal with whatever dollars we have available."
Wednesday, House Speaker-designate Ray Sansom seemed the most calm, noting that lawmakers authorized Gov. Crist last spring to spend almost $1.7 billion in reserves this year if necessary.
Lawmakers made hard choices last session and will do so again, said Sansom, R-Destin, who oversaw the House budget. They will set budget priorities after the November election, he said.
"But no one is in a panic mode," he said. "We completely anticipated what's happening would happen."