Florida Lawmakers Agree on $65B Budget With Employee Pay Cuts

BRADENTON, Fla. - The Florida Legislature continued its session into this week to complete work on a $65 billion budget. The regular session ended Friday without a budget for the coming fiscal year, which begins July 1.

After a long weekend at the negotiating table, conferees gathered early yesterday and quickly reached agreement on final issues, including employee pay cuts.

The agreement paves the way for the voluminous budget document to be printed in time for the full House and Senate to vote on it by the end of this week.

Final budget documents were not available at press time, but the 2010 spending plan is fortified with nearly $5 billion in federal stimulus funds from the American Recovery and Reinvestment Act of 2009. It incorporates increases in various taxes and fees, including a $1 hike in the tax on a pack of cigarettes and hikes in college tuition.

The budget includes some bonding but the total amount was unknown at press time yesterday. However, there is no new debt service provided for additional borrowing for the state's premier environmental and conservation land purchase program known as Florida Forever, which has more than $200 million of bonding capacity remaining.

The budget also institutes a 2% reduction in the wages of state employees making more than $45,000 a year, which did not make Gov. Charlie Crist happy.

"I understand the reality of where we are," Crist said.

Lawmakers now turn their attention to another sticking point during their 60-day regular session - a controversial Indian gaming compact that could bring the state as much as $800 million in new revenue immediately and a total of $2.5 billion over 25 years that Crist wants earmarked for education.

Legislative committees studying the tribal compact issue have been unable to agree on how much new gambling is enough in order to approve a compact with the Seminole Tribe of Florida. And even if they reach an accord on a compact, there's no guarantee that the Seminoles will agree.

The issue of a compact has dragged on for more than two years since Crist unilaterally negotiated and signed a compact with the tribe authorizing Las Vegas-style gambling at Indian gaming facilities across the state.

State lawmakers felt the governor did not have the authority to sign a compact without their approval and went to court. The Florida Supreme Court agreed and struck down the agreement.

In the meantime, the Seminoles have expanded their facilities to include games that currently are not allowed by state law.

Florida has suffered from dramatic drops in revenues as the recession continues and the state's real estate market flounders with values plummeting.

The "precipitous drop in revenues" led Moody's Investors Service late last month to become the first agency to place Florida's Aa1 implied general obligation rating on watch for possible downgrade.

The state's implied GO rating is AA-plus by Fitch Ratings and AAA by Standard & Poor's, both of which have placed a negative outlook on the credit.

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