Florida House, Senate Set to Weigh Their Versions of Budget-Cutting Bills

BRADENTON, Fla. - Florida's House and Senate today each consider their own versions of budget-cutting bills, one of which would prohibit a long-running bond program from issuing any new debt for the rest of the current fiscal year.

Lawmakers are in a special two-week session to cut $3.2 billion from the state budget because of plummeting revenues. Both the House and Senate have concentrated largely on dipping into reserves and trust funds, and ordering state agencies to cut up to 4% from their budgets.

But there is at least one major difference in the bills being considered by the two chambers. The Senate's appropriation-reduction bill would also transfer $21 million from the Florida Forever bond program to the general fund as one of many ways to avoid budget cuts.

The transfer would not affect the payment of debt service on outstanding bonds, said Ben Watkins, director of the state Division of Bond Finance. But the transfer would mean that approximately $422 million of debt won't be sold by the state's popular environmental land acquisition program this year.

The bill also orders state environmental officials to allow options already obtained on prospective land purchases to lapse. The amount of funding that would be lost due to lapsed options was not immediately available.

"I believe that Florida Forever is an excellent program. Preserving state land is a worthwhile endeavor," said Senate Budget Committee chairman J.D. Alexander, R-Lake Wales. "However, we are in a budget crisis of unprecedented proportions."

Florida Forever is not a critical program, Alexander argued. Senate committees reviewing the budget gave priority to funding areas critical to teaching, housing, feeding, transporting, protecting, caring, and creating jobs, he added.

Cutting Florida Forever funds will be one of the items discussed in conference committee meetings this weekend.

Another issue House and Senate conferees are expected to discuss when they meet is a proposal making changes in the laws governing the budgets of Florida's 67 public school districts, some of which are suffering because of the recession.

Some districts are experiencing difficulty because of reduced state funding due to dwindling enrollment. Across Florida, the number of students in school is 17,500 less than projected for the current school year. Schools are also poised to lose still more state funding under cuts currently being considered by the Legislature.

A proposed Senate bill would require school districts to cut employee salaries and renegotiate collective bargaining agreements if the general fund balance drops below 2% of revenues to forestall a financial emergency. If districts are unwilling to cut payroll, the state commissioner of education could step in.

State officials prefer that school districts reserve 5% of their fund balance. However, preliminary annual financial reports as of June 30 showed that 23 districts had an unreserved fund balance at the end of fiscal 2008 of less than 5%, according to an analysis of the Senate bill.

The state can declare a district to be in a financial emergency if it cannot make payroll or related expenses, cannot make timely debt service payments, or cannot pay other expenses such as utilities.

Florida Education Commissioner Eric Smith told a Senate committee yesterday that the law currently is not clear about whether he has the authority to order salary cuts.

Since June 30, Smith said one school district has received help from his department and is recovering from financial problems.

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