Crist offers up $70B budget
Published: Friday, February 1, 2008 at 6:01 a.m.
Last Modified: Friday, February 1, 2008 at 6:37 a.m.
TALLAHASSEE - Confronting the most dismal financial outlook the state has seen in decades, Gov. Charlie Crist on Thursday proposed an optimistic $70 billion budget for next year that avoids layoffs and sharp cuts in state programs while boosting spending for education, health care and prisons.
Crist's budget at a glance
Florida's state budget has dropped from a high of $73.8 billion in 2006-07 to Gov. Charlie Crist's proposed $70 billion budget for 2008-09. The governor's spending plan is about $900 million less than the current $70.8 billion budget. The new budget :
Contains no new taxes or tuition increases, although it would increase fines paid by overweight trucks.
Relies on $1.1 billion in state fund shifts, including using $400 million from the settlement with the tobacco companies.
Uses about $600 million from expanded gambling and Lottery games, including the use of vending machines to dispense tickets.
Cuts about $300 million from existing state programs, including ending a state tuition grant program for students attending private colleges and cutting $60 million in Medicaid payments to HMOs.
Increases the state workforce by about 1,300 employees, primarily related to the expansion of the state prison system.
Provides $1billion in new spending for education, including a per-student spending increase of $394 in public schools.
Boosts clean energy initiatives by $200 million, including $100 million for an incentive program for businesses to develop "green" technology.
Provides $500 million in environmental initiatives, including efforts to clean up Lake Okeechobee and the Everglades.
Creates a $64 million program to provide health care to uninsured Floridians in 14 counties, including Sarasota and Alachua.
Boosts spending on the Kidcare insurance program to cover an additional 46,000 children.
Provides $6.6 million for a smoking prevention program aimed at teenagers.
Builds more state prisons with a $342 million initiative and provides $29 million for increased substance abuse programs for inmates.
Provides $318 million in affordable housing programs.
Sets aside $94 million for state worker pay, which represents a 2 percent increase for each agency.
But the budget is based on economic forecasts that may further deteriorate. It relies on revenue sources, such as Seminole gambling proceeds, that may not materialize. And it avoids major cuts by shifting more than $1 billion in existing state funds, including using $400 million from the state's settlement with the tobacco companies.
Crist defended the 2008-09 budget plan as a prudent measure during "extraordinary economic times,'' while arguing the newly approved property tax cut will help the state's recovery.
"I believe our economy is going to get better,'' Crist said. "The passage of Amendment 1 on Tuesday will help Florida significantly and the estimators already predict we're going to have an uptick and come out of it.''
The governor's characteristic optimism may be tested by Florida's slumping economy.
Crist's budget is based on a November revenue estimate. Since then, Florida's tax collections have further declined, running under the estimate by $76.3 million through December, with officials expecting an even grimmer report from January.
State lawmakers are preparing to cut the current $70.8 billion budget again when they meet in their annual 60-day session in March. House budget leaders have said they may need to prune as much as $2 billion from the state's base budget in order to assure necessary funding for top priorities, such as education and public safety.
Crist's budget does include about $230 million in budget cuts, including ending a state tuition grant program for students attending private colleges in Florida and by cutting $60 million in Medicaid reimbursements for HMOs.
The budget would increase fines for overweight trucks on the state highways, bringing in an additional $35 million a year.
It also relies on about $250 million that will come from the expansion of the Florida Lottery - including the first time use of vending machines to dispense tickets - and $130 million from the Seminole Tribe gambling agreement, which is being legally challenged by the state Legislature.
Crist also shifted $1.1 billion from existing state trust funds, including $400 million from the tobacco fund, to underwrite his budget.
With the money, Crist proposed a $1 billion increase in education spending - which he outlined several weeks ago. He also would spend $200 million on clean energy initiatives and $64 million on a new pilot program to bring health care to uninsured Floridians in 14 counties, including Alachua and Sarasota.
He would spend $50 million for the cleanup of Lake Okeechobee, while seeking $100 million in bonds to pay for the Everglades restoration and $300 million for the Florida Forever land-buying program.
Facing a growing prison population, Crist proposed spending $343 million on new prison construction as well as spending $29 million to expand substance abuse programs for inmates, with the goal of keeping more of them from returning to the system.
Crist's budget plan will face skepticism in the Legislature, where lawmakers will vote on a budget bill before their session ends on May 2. The new budget takes effect July 1.
House leaders have already voiced their opposition to using one-time funds, or fund shifts, to support ongoing programs. "Employing this strategy will only postpone and worsen the situation,'' Ray Sansom, R-Destin, the House budget chairman, said in a memo to his members in early January.
"With current estimates showing a $2 billion shortfall in upcoming years, the House believes that thoughtful spending reductions would best serve Florida long-term, not tax increases, accounting transfers or a new reliance on one-time or stagnant revenue sources,'' Sansom said Thursday.
Senate budget chair Lisa Carlton, R-Sarasota, said one of the key factors in building the state budget will be the next revenue estimate in March.
"Make no mistake, this is going to be a very challenging budget year,'' Carlton said. "It is critical that we approach our work with a long-term view, keeping a keen eye on the condition of our economy in Florida and nationally.''
Carlton said the Senate would approach the budget crisis "with fiscal discipline as we prioritize spending, cut costs and strategically invest in an economic stimulus package for our state.''
Democrats applauded the governor's decision not to slash state programs, while adding their own skepticism as to its viability.
"While I think it may be more of a faith-based budget than one grounded in reality, at least the governor recognizes that Florida can't sustain massive cuts to education, health care and public safety,'' said House Democratic leader Dan Gelber of Miami Beach.
In seeking to use $400 million from the Lawton Chiles Endowment to pay for social services programs for children and other needy Floridians, Crist said he asked the late governor's widow, Rhea Chiles, for her blessing on the move, which she gave. "I'm very grateful to her,'' Crist said.
But another proposed fund transfer - taking $130 million from a workers' compensation account - drew the ire of Chief Financial Officer Alex Sink. She warned taking that much money from the account could cause the state to raise the assessment - or tax - on businesses as early as January 2009.
House education chairman Joe Pickens, R-Palatka, said that Floridians might begin noticing the impact of the budget crunch this year. He said at least one school superintendent in his north Florida district has already announced a freeze on hiring, travel and other spending.
"You're going to slowly see a progression of school districts announcing similar actions,'' Pickens said.
With constitutional limits on class sizes, that would mean cuts in areas like administration, police officers assigned to schools and field trips.
"All the things that are not associated with direct classroom instruction, but are things that people have come to expect,'' Pickens said of the likely cuts for schools.
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