Lawmakers tap reserve fund to help plug budget hole

TALLAHASSEE — A select panel of lawmakers tapped $672-million from a reserve fund Wednesday, but Florida is still facing a potential budget deficit that could force the Legislature into special session after the November election.

The Legislative Budget Commission unanimously approved the transfer recommended by Gov. Charlie Crist.

It falls $795-million short of filling a projected $1.47-billion hole in the budget for the current fiscal year that ends June 30. Even bigger gaps are predicted for the next three years by a long-range outlook the panel also approved.

The Florida Constitution prohibits budget deficits, but the commission agreed with Crist, who wants to delay any further action until after state economists update their revenue forecast in November.

The deficit in the $66-billion budget has been caused by lower-than-expected tax and revenue collections blamed on Florida's sputtering economy.

House Policy and Budget Chairman Ray Sansom, R-Destin, a member of the commission and in line to become House speaker in November, said it's too early to make spending decisions for the latter part of the fiscal year.

The commission agreed to apply half of the state's $1.3-billion budget stabilization fund to offset the deficit. That's the maximum the governor and the commission can take out of the fund on their own.

They also could borrow up to $1-billion from the Lawton Chiles Endowment, which invests money from the state's huge tobacco settlement for future use on children's programs and health programs.

But Crist didn't ask for any of that money. He's hoping to make up the rest of the deficit in other ways, including a 4 percent spending hold-back he ordered for executive branch agencies in June.

That could save nearly $900-million if all agencies withhold the full amount. But Crist's budget director, Jerry McDaniel, told the commission the actual figure may be no more than $300-million. That's because many programs such as Medicaid or prisons cannot be cut without violating laws and court orders or losing millions in federal matching money.

Lawmakers tap reserve fund to help plug budget hole 09/10/08 [Last modified: Tuesday, November 2, 2010 4:32pm]

Join the discussion: Click to view comments, add yours

Loading...