Crist puts freeze on spending
TALLAHASSEE (AP) – Gov. Charlie Crist on Thursday put a 15 percent hold on general revenue spending for the last quarter of the budget year in case Florida’s financial swoon worsens.
His budget director, Jerry McDaniel, sent a memo to state agencies saying they would get only 85 percent of their appropriations when money is released at the start of the fourth quarter, which runs from April through June. McDaniel added his office will inform agencies as soon as possible on releasing remaining funds, citing a need for “an abundance of caution.”
The governor’s office did not put a dollar figure on the holdback, but it could amount to more than $700 million based on previously released revenue estimates.
General revenues – largely sales tax receipts – make up about a third of the current $65.5 billion annual budget, but pay for the day-to-day operations of schools, prisons and other state services. There will be no holdback from trust funds that make up the bulk of the budget including such spending as school and highway construction.
The holdback is further evidence of the state’s dire financial condition, said state Sen. Dan Gelber, D-Miami Beach.
“We’re in a total state of dysfunction,” Gelber said. “We are almost a business that is unable to make cash flow and doesn’t have to plan to get out of it. And we can’t keep cutting health care and education.”
Senate Ways and Means Chairman JD Alexander, R-Lake Wales, said his chamber encouraged the governor to release money on a monthly basis but supports the holdback until Florida begins receiving federal stimulus money needed to offset revenue shortfalls.
“I would anticipate there would be adequate funds to fulfill the current state budget, but given the lack of certainty of this new funding stream coming from our federal partners, I would support the governor’s decision to be cautious,” Alexander said.
“If everything works as planned it shouldn’t be a problem,” he said. “I don’t believe we have to make those kind of cuts. It was the governor’s choice to go this particular route.”
Rep. Marcello Llorente, a Miami Republican who chairs a House panel overseeing health care and general government spending, said Crist had made “a responsible decision in light of the declining revenues.”
State economists last week reduced their forecast for current year general revenues by $1.1 billion to $20.4 billion since their previous forecast in November. They also dropped their estimate for the next budget year by nearly $2.4 billion to $20 billion.
Llorente said he expects the House to join the Senate in accepting stimulus money although representatives are still studying parts of the federal plan that have strings attached.
Even before the current budget took effect last July, Crist had ordered a 4 percent holdback – 1 percent each quarter – because taxes and other revenues were dropping. The new directive includes the 1 percent previously ordered for the fourth quarter.
House Speaker Larry Cretul, R-Ocala, sent a memo to representatives saying he expected the chamber to vote April 17 on its version of next year’s budget. That would leave two weeks for the House and Senate to resolve differences in their budget bills before May 1, the last day of the regular session.