Lawmakers plug part of state budget hole

Sep 11, 2008

MARC CAPUTO

Miami Herald


Facing huge deficits, Florida legislators started raiding the state's savings accounts Wednesday when they shifted $672 million from a special piggy bank to keep the lights on and the services going, from the courthouse to the schoolhouse.
But it's not nearly enough.

The state's $66 billion budget still has a hole of almost $800 million that will have to be plugged by year's end as the state's tax collections continue to spiral down with the economy.

And next year's economic forecast is even worse: a deficit of up to $3.5 billion if state legislators decide to keep current programs going.

`DEEP DOO-DOO?'

'Would it be safe to summarize and say the state budget is in deep doo-doo?' state Democratic Rep. Ron Saunders of Key West asked rhetorically when the Legislative Budget Commission took up the budget.

No one on the commission, empowered to shift around money on behalf of the 160-member Legislature, answered Saunders. They unanimously decided to plug half of this year's $1.5 billion budget hole.

They'll finish the budget-filling job sometime in November -- after election season and after state economists issue another forecast of the state's financial health.

If previous economic forecasts are any indication, the state can expect to be in even worse shape as the housing market continues to tank.

'It is definitely going to take some prudent financial management to get through the next couple of years,' said state economist Amy Baker.

She said the state could start seeing surpluses in the 2011-12 budget year when she thinks the economy will improve.

Noting that prison spending and Medicaid needs are increasing, Baker said next year's budget could have a hole of between $2.5 billion and $3.5 billion because state needs are outpacing state tax collections.

Sen. Nan Rich, a Sunrise Democrat, fretted that the state has 'a dysfunctional tax system' and that the $6 billion in cuts during the last budget year were 'draconian' and could hurt children, the sick and needy.

'I don't think we can balance this budget in the future just by continuing to reduce spending, cut services and leave our kids unsafe or uneducated,' Rich said.

NO TAX INCREASE

But the Republican-led Legislature has no interest in raising taxes, even so-called sin taxes on cigarettes, alcohol or gambling, said incoming House Speaker Ray Sansom of Destin. Sansom said the Legislature is living within its means and that there's an advantage to the budget cuts: Smaller government.

'Today really is a good day for Florida,' Sansom said. ``I have three [children] in public school. They're getting as good or better an education this year than they've ever had. They're as safe in their schools as they've ever been.'

Sansom said the Medically Needy program for transplant patients and a medical program for the frail elderly -- which barely survived this year's budget ax -- have a chance of surviving next year as well.

Now that they've filled half the budget hole with money from what's known as the Budget Stabilization Fund, lawmakers and Gov. Charlie Crist can tap up to $1 billion more in a tobacco settlement money from a savings account called the Lawton Chiles Endowment.

TWO OPTIONS

Also, lawmakers could reduce the remaining $800 million deficit two other ways: by signing off on in-house budget reductions that Crist requested of his agencies and by sweeping special savings accounts that have upward of $400 million into the general revenue budget.




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