Crist: Tap healthcare funds to plug budget holes

Jan 31, 2008

Posted on Thu, Jan. 31, 2008–Miami Herald

Crist: Tap healthcare funds to plug budget holes

Confronted with a souring Florida economy and a gaping $2 billion budget shortfall, Gov. Charlie Crist on Thursday proposed tapping more than $1 billion in money from dedicated accounts for healthcare and insurance to balance the state budget in the coming year.

The governor’s $70 billion spending plan is nearly $2 billion less than the original spending plan built by the governor and Legislature last year as the state’s weak housing market has sapped the amount of money coming into state hands.

The downturn forced state lawmakers in October to slash $1 billion from the current $71 billion state budget but, since then, state tax collections have continued to fall short of estimates.

Crist has chosen to tap into the special accounts, known as trust funds, as a temporary solution but it is a tactic often rejected by fiscally conservative legislators, even during years of revenue decline.

”Florida reserves continue to remain strong,” Crist said Thursday. “Even with utilizing some of these trust funds, we maintain a balance of $4.5 billion.”

He said the declining state revenues, ”represent a historic challenge that this administration is facing,” Crist said. He predicted the economy will improve, however, and give Florda added revenues in the future to replenish the trust funds.

Crist repeated his recommendation that the Legislature restore the $100 million in school district revenues that is expected to be lost because of the property tax amendment approved by voters on Tuesday. He also wants to continue the back-to-school and hurricane preparedness sales tax holidays. Sen. Lisa Carlton, Senate Appropriations chairman, said the Senate will review Crist’s budget recommendations but she stopped short of embracing any of his priorities. She also noted that the governor is working on revenue estimates that will be outdated in a couple of weeks, thereby raising more questions about how solid his proposals will be. ”There are many pieces of information that the Senate will use to build a budget this year — the most significant will be the next revenue estimating conference numbers,” she said in a statement. “Make no mistake; this is going to be a very challenging budget year.”

She added: ”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.” House Speaker Marco Rubio has already suggested cutting at least another $600 million in early March. Rep. Ray Sansom, the chief budget writer in the Florida House, told House members that the state needs $2 billion worth of cuts on top of that in order to balance the budget for the coming year. The state fiscal year starts on July 1.

Jerry McDaniel, Crist’s top budget staff, said the governor’s proposed budget also relies on spending one-time sources of money for the coming year. Such a move, if endorsed by the Legislature, would trigger a supermajority vote. Voters in 2006 approved an amendment that capped the amount of one-time money that can be used in the state budget.

To counter critics of Amendment 1, the property tax amendment approved by voters on Tuesday, Crist earlier this month unveiled his education spending plan, proposing to boost school spending by $1 billion. His budget proposal included setting aside money that school districts could lose under the new amendment.

Crist’s spending plan on schools relies on a $337.8 million increase in local property taxes. Crist also proposed slashing money the state now spends on a financial aid program that awards $3,000 to Florida students who attend private universities such as the University of Miami.

Crist wants to limit state financial aid to students who also attend private, for-profit universities, such as Keiser University. The state would only offer financial aid to students who are already receiving state stipends during this school year and would not offer it to any new students.

The governor’s budget is only a recommendation that can be accepted or rejected by state lawmakers. Last year, legislators practically ignored Crist’s budget recommendations. He released them the day after tornadoes struck Central Florida and lawmakers rejected several of his key suggestions.

Staff writer Mary Ellen Klas contributed to this report.