BRADENTON, Fla. - A top Florida lawmaker is opposing a plan by the governor to cure a portion of the state's projected $2.3 billion budget deficit by using proceeds from a controversial Indian gaming compact and non-recurring revenues, instead of cutting programs dependent on recurring revenues.
A memorandum critical of Republican Gov. Charlie Crist's recommendation to cut the budget using compact revenues, budget reserves, and bonding was distributed to lawmakers yesterday by Senate President Jeff Atwater, R-North Palm Beach.
The memo was written by Senate Ways and Means chairman J.D. Alexander, R-Lake Wales, in advance of the special legislative budget session that begins Monday and runs through Jan. 16.
The budget plan suggested by Crist last week avoids furloughs and layoffs, but it could run into problems beyond opposition from some lawmakers.
Crist's top recommendation is to take $600 million from the Lawton Chiles Endowment Fund, which receives national tobacco settlement revenues for children and elderly programs. It would be the second, and largest, withdrawal from the fund for budget purposes.
Although Crist has promised to repay the money, opponents have threatened to sue the state if the fund is tapped again.
Crist also recommended cutting $561.5 million by making permanent some of the funds he asked state agencies to hold back in anticipation of falling revenues. Another $325.3 million would come from reserves in special trust funds that receive designated fees and assessments. He also proposed bonding $314 million for prison construction instead of using cash.
Some $290.3 million would come from the budget stabilization fund, leaving a balance of $424 million in reserve. And $88.9 million in unexpended capital outlay funds would be redirected to plug budget holes.
But $135 million would come from the controversial Seminole gaming compact that the Legislature planned to examine during its regular session in March since the Florida Supreme Court in September ruled that the compact negotiated and signed by Crist a year ago was invalid.
The state received $50 million when the compact was signed, but the funding never was appropriated because the Legislature filed suit, saying Crist did not have the authority to unilaterally negotiate it. Crist's 25-year compact also required the tribe to pay the state $100 million a year.
"President Atwater has made it clear that the Indian gaming compact will be vetted during the 2009 regular session - rendering any revenue garnered from an agreement off the table for the special session," Alexander warned lawmakers.
In addition, Alexander said most of the governor's recommendations are primarily non-recurring in nature and he believes the Senate should consider cuts in programs dependent on recurring funds "in an effort to end the ominous cycle of reductions from past budgets."
Florida's economists for the past two years have consistently lowered their projections for revenue supporting the state budget, and the decline finally took its toll earlier this month when Fitch Ratings changed its outlook on the state's credit to negative. Moody's Investors Service changed the outlook to negative in March.
Over the years, analysts have praised Florida's elected leaders for taking swift action to trim the budget.
So far, the Sunshine state has maintained its general obligation equivalency ratings of AAA from Standard & Poor's, AA-plus from Fitch, and Aa1 from Moody's.
Standard & Poor's still maintains its stable outlook, but analysts are currently evaluating the state's position.
