BRADENTON, Fla. -Florida's top lawmakers late Sunday negotiated a $65.02 billion state budget for fiscal 2009 that includes $1.35 billion of new debt.
The spending plan for the fiscal year that starts July 1 - which is not expected to receive a final vote by the full House and Senate until at least Thursday - offers relief for concerned professional sports teams in the state that leveraged a $2 million state sales tax subsidy to build new venues.
The subsidy is part of a program enacted by the Legislature in 1991 to help with the construction of professional sports facilities. It gave specified teams $2 million of state sales taxes annually over 30 years, which they could use to secure bonds. Most teams, through cities, counties, and conduit issuers, sold debt backed by the state sales tax for new or renovated football, baseball, basketball, and hockey venues.
A proposal to trim the subsidy came amidst a second year of downward revenue collections. General revenues supporting the fiscal 2008 budget are expected to be $4.2 billion less than originally thought. Lawmakers have already cut the original $71.5 billion budget and have taken other cost-cutting measures to reduce the bottom line. Forecasters have dropped revenue estimates supporting the fiscal 2009 budget three times, which left legislators with close to $5 billion less in revenue than originally anticipated.
Saying they could not justify funding venues for billionaire owners of sports franchises while approving budget cuts affecting Florida's "most vulnerable citizens," the full House adopted a budget that placed a year-long freeze on the sales tax subsidy that could have interrupted funds pledged to pay debt service.
However, the compromise fiscal 2009 budget approved Sunday allows the sales tax subsidy to continue, Eliza Hawkins, with the Senate Fiscal Policy and Calendar Committee, said yesterday.
"The funding is in the budget because the Senate rejected the House proposal to take it out," she said.
While the House budget included no new debt issuance in fiscal 2009, top negotiators for both chambers late Sunday agreed to authorize $924 million of new public education capital outlay bonds, $300 million of Florida Forever land conservation bonds, and $125 million of bonds to finance prisons. For the first time in many years, Florida's budget includes no new debt service for transportation. However, lawmakers are working on an omnibus transportation bill this week that could provide state and local agencies with new options regarding tolls and leasing existing toll roads.
To craft the fiscal 2009 budget, lawmakers made cuts in health care services and education. They increased fees for court services, boat registrations, and college tuition. State employees will not get a pay increase, but state troopers will get 5% hike designed to stem a high turnover rate. Lawmakers will reduce their own salaries by 5%.
"Florida is in a recession, resulting in the worst government budget conditions in Florida's history," House Speaker Marco Rubio, R-West Miami, said in response to the budget compromise. "It is important to remember that as bad as it may seem for government, our people are hurting even more. I am pleased that we have produced a budget that is balanced and protects core services."
Under legislative rules, the House and Senate must vote for or against the new budget. They cannot add or remove items.
In response to Florida's rapidly declining economy, Moody's Investors Service on March 19 placed a negative outlook on the state's Aa1 general obligation debt rating. The state's GOs are rated AAA by Standard & Poor's and AA-plus by Fitch Ratings with a stable outlook.
The Legislature's annual session ends at 6 p.m. on Friday.
