Lawmakers nearing deficit reduction deal
TALLAHASSEE (AP) – A deficit-reduction package that includes nearly $1 billion in spending cuts for schools, health care, social services and other state functions cleared a pair of House panels Wednesday.
Lawmakers are meeting in special session to deal with a shortfall of at least $2.3 billion in the current state budget that runs through June 30.
The rest of the budget hole would be plugged by increasing traffic fines, tapping reserves and shifting money or borrowing it from trust funds including an endowment that invests the state’s tobacco settlement for future use on health care programs for children and the elderly.
Republican majorities in the two House appropriations councils approved the adjustments to a $66.3 billion state budget on party line votes as a prelude to floor action Thursday.
Democrats argued Florida’s share of Democratic President-elect Barack Obama’s promised stimulus package would reduce the need for many of the spending cuts.
“I have a great deal of faith in the leadership of the incoming administration and I think it will be coming,” said Rep. Keith Fitzgerald, D-Sarasota.
Republicans said they’ve already built in provisions to use the stimulus money if it becomes available.
Rep. Ron Saunders, D-Key West, also questioned a decision by the Council on Education and Economic Development to transfer $283 million from the state’s affordable housing program and $235 million from its transportation trust fund, which goes for such purposes as building roads.
Saunders said taking money from those purposes would hurt efforts to stimulate Florida’s sagging economy.
“We don’t need new houses,” replied Rep. Rich Glorioso, who heads a sub-panel that deals with both issues. The Plant City Republican noted there’s already a glut of homes on the real estate market.
“I believe that we can continue that program putting people into houses through the down payment assistance program with the dollars … left remaining,” Glorioso said. The shift would leave more than $100 million in the housing program.
Most of the transportation fund comes from fuel taxes. Glorioso said it also has received $2.5 billion in general tax dollars – primarily sales tax – since 2005, so taking some of that money back is “not that big of a hit.”
The Appropriations Council on General Government and Health Care voted to borrow $400 million from the tobacco endowment. It’s now at about $1 billion – half of what it was worth in June due to market declines and money already appropriated for current spending.
That money could be repaid from federal stimulus funds. A special legislative panel with members from both chambers also could borrow another $600 million from the endowment that’s named for the late Gov. Lawton Chiles.
“Selling the fund now is one of the most fiscally irresponsible things I’ve ever seen,” said son Lawton “Bud” Chiles III.
That’s because the endowment would have to liquidate investments at a loss. Chiles said his family is considering a lawsuit to block the fund shift.
Senate Ways and Means Chairman JD Alexander said his chamber plans to take $20 million out of state’s Florida Forever environmental land-buying program to avoid deeper cuts to such programs as education and health care.
“Florida Forever is an excellent program,” said Alexander, R-Lake Wales. “However, we are in a budget crisis of unprecedented proportions.”
His committee will consider the Senate’s reduction package Thursday. The full Senate will take it up Friday. Conference committees then will try to resolve differences before final votes.