BRADENTON, Fla. — Florida Gov. Charlie Crist Friday unveiled a $69.2 billion budget proposal for fiscal 2011 that, if accepted by the Legislature, would authorize the least amount of annual debt issuance in more than a decade.
The spending plan exceeds the current budget by $2.7 billion and Crist, who joked about his reputation for being an eternal optimist, admitted that it relies on some big assumptions.
The budget is built on projections by economists that revenue will improve by $2 billion after several years of decline. It also depends on Congress again authorizing higher Medicaid payments as it did this year. And for it to work, lawmakers must finally approve a disputed gambling compact that will free up $225 million that has been held in escrow for several year now.
Crist, a Republican, said his budget utilizes $4 billion in stimulus funds, adding: “I’m glad to have it.”
Using the remainder of the two-year federal allocation will leave a hole in fiscal 2012. But that won’t be Crist’s problem since he is not running for a second term as governor this year. Instead, he is running for the U.S. Senate seat being vacated by fellow Republican Mel Martinez.
His final budget proposal taps general fund reserves yet another year, leaving just $276 million. It was not immediately clear how much the budget takes from reserves in various trust funds, which are accounts for specific state programs, such as transportation, that receive funding from earmarked sources.
Unlike other states, Florida typically combines the general fund and trust fund reserves to determine the total amount available for reserves, which rating analysts consider when they review the state’s rating. Florida is rated AAA by Standard & Poor’s, AA-plus by Fitch Ratings, and Aa1 by Moody’s Investors Service. All three agencies assign negative outlooks.
Under the plan, there will be no state employee layoffs or furloughs, and no changes to employees’ insurance contributions. And Crist is only recommending $200 million in overall spending reductions, mostly administrative cuts.
The budget plan depends on whether the economy improves. Florida was hit particularly hard by the recession and Crist acknowledged that home values are down and unemployment remains high.
“We’re hopeful that we’re starting to turn the corner,” the governor said, noting that home sales are up 31% this year. “Something is starting to percolate in Florida’s economy.”
Many of the state’s bonding programs rely on specific revenue, some of which remains extraordinarily low compared to the boom years.
Crist recommended a bond package totaling just $835.2 million — the smallest amount since 2000.
The largest amount to be sold under his plan is $627.4 million for various transportation programs, including $115.1 million of grant anticipation revenue vehicle bonds, or Garvees.
Bonding for the state’s public education capital outlay program would drop to just $46 million in fiscal 2011, compared to $155.1 million this year. But the authorization does include $50 million of bonds for school and community college district capital outlay projects.
Crist’s budget includes $55.9 million of bonds for Everglades restoration. Another $55.9 million is included for the Florida Forever environmental program, bonds secured by documentary stamp tax revenue collected mostly on real estate sales. Nothing was included in the current year for Florida Forever because documentary stamp tax revenue has plummeted. Before the recession, the state typically authorized $300 million a year in bonding for the program.
Crist’s budget proposal is only a recommendation. It is the Legislature’s job to craft the plan during its regular session, which starts March 2. However, the governor does have line-item veto power over the final budget.