More spending cuts likely for Fla. budget
TALLAHASSEE (AP) – After cutting $7 billion in spending over the past two years, Florida lawmakers are likely to do more slashing to balance another tight budget, but they’re also looking at two previously taboo revenue-raising options: tax increases and gambling.
The Republican-controlled Legislature, though, may do little more than just look at those alternatives when it convenes in regular session March 3 because of an estimated $12 billion in federal stimulus money heading Florida’s way over the next two years.
Gov. Charlie Crist says he thinks there’ll be enough federal cash to stave off tax increases and hold down spending cuts if the Legislature also approves an agreement with the Seminole Indians to pay the state millions every year in exchange for being allowed to expand gambling at tribal casinos.
“What we need to do is continue to try to lessen the burden on Florida families,” the Republican governor said. “We need to respect the value of a dollar. Raising taxes is not the kind of thing I’m interested in.”
Legislative leaders, though, aren’t counting on the stimulus to solve all budgetary problems because they are so dire.
“I hope that may be the case,” said Senate President Jeff Atwater, R-North Palm Beach. “I think it’s going to be a hard reach to get there.”
Budget cuts since 2007 already have resulted in reduced services and layoffs, including probation officers and teachers. More of the same may be coming if lawmakers again reduce spending.
Revenues have fallen below official estimates state economists make three times a year, but they’ve been blindsided by the depth and duration of Florida’s economic slump.
A homegrown housing market collapse and the state’s volatile tax structure have put Florida on a downward slide that’s been exacerbated by the national and global recession.
It’s been a bust of historic proportions. For the first time since the state’s forecasting system began in 1971, general revenue has declined three years in a row. The 2009-10 budget year that starts July 1 could be the fourth.
The last revenue estimate in November predicted a slight uptick, but more bad news is expected when the economists next update the forecast 10 days into the legislative session.
Current-year revenues already have fallen more than $200 million below the November estimate. If that trend continues, the Legislature will have to make more adjustments to this year’s $65 billion budget to avoid a constitutionally prohibited deficit.
That’s after lawmakers passed a $2.5 billion deficit-reduction package at a special session in January. Besides spending cuts, the plan tapped reserves, borrowed from trust funds and raised traffic fines.
The Legislature then will draft a budget for the next fiscal year. It’s expected to have a gap of $5 billion or more between anticipated revenue and the cost of must-fund programs such as schools, Medicaid and prisons, but that’s not counting federal stimulus dollars. The exact amount of federal money that can be used to plug various budget holes has not yet been determined.
Dropping real estate values also have cut property taxes school districts are required to put into the state’s funding program by up to $1 billion. That’ll leave lawmakers the choice of increasing the tax rate or replacing lost local dollars with state money.
The House has been cool to tax increases, but Senate leaders say the time is right, with the state facing potential deficits, to put aside the GOP’s no-new-taxes doctrine for reasons that go beyond bringing more money into state coffers.
Without a personal income tax, Florida relies most heavily on sales, corporate income and real estate transaction taxes. They fluctuate wildly, usually bringing in more money than needed when the economy is hot but not enough when it runs cold.