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Crist's proposed $66.5 billion budget relies on federal stimulus

TALLAHASSEE — Promising more spending and no worker layoffs, Gov. Charlie Crist on Friday proposed a $66.5 billion budget bolstered by huge sums of federal stimulus money and rosy financial assumptions.

Crist boasted that his proposal calls for no new taxes. But he wants to raise college tuition rates by up to 15 percent, slap a 6-cent-a-gallon fee on bottled water producers and increase car registration fees by 10 percent to raise a total of $529 million.

The federal stimulus money is the key to his budget. Crist wants to spend $4.7 billion of it, mostly on education, transportation projects and health care for the poor.

While his fellow Republicans have bashed the stimulus package, it's a political lifesaver for Crist, who has ambitions for higher office.

"I think it's fantastic. Are you kidding me? We don't have to raise taxes," Crist said. "We might be able to cut property taxes some more. We have more money for education so we can increase per-student spending. We can spend more money on our roads and infrastructure. We can provide health care for our people. I mean, it's remarkable."

The budget also drains special accounts known as trust funds, borrows money for new prisons and asks lawmakers to approve a gambling agreement with the Seminole Tribe of Florida that could raise about $288 million next budget year.

One major potential flaw with the proposed budget: The Constitution forbids the state from paying for more than 3 percent of its recurring expenses with one-time money, such as the funds from the federal stimulus plan. But Crist wants to exceed that limitation fourfold, pushing it to 12 percent. He would need three-fifths votes in both houses of the Legislature to approve his budget, giving Democrats a bigger say in budget decisions.

Republicans, who control the Legislature, issued statements praising Crist but not his budget plan or the stimulus package. Both are lengthy documents with tricky language, and legislators say they still don't know what "strings are attached'' to spending the stimulus money.

"There is still uncertainty about the federal stimulus package and about Florida's future revenues," said acting House Speaker Larry Cretul, R-Ocala. "Adding federal stimulus money to the Florida economy may help Floridians during these harsh economic times. However, the stimulus money cannot be seen as the only solution to balancing the state's budget."

Cretul noted that state economists will meet in March to update the estimate of the state's revenues, which have tanked over the past two years. Crist based his budget on the November 2008 estimate that economists say is already about $214 million lower than actual collections.

Some legislative leaders are bracing for a projected budget deficit of up to $5 billion, $2 billion more than the current estimate. They also fear that the state-set property tax for schools could have a $1 billion hole. But Crist's budget experts say it will be less than half that.

Rather than increase the school property tax rate, Crist said the federal stimulus money should plug the hole. At the same time, Crist said he wants to ask voters to approve a series of tax-cutting constitutional amendments in 2010. If approved, they could take away $245 million from schools.

Crist has said that he doesn't see a contradiction in cutting school money from counties while asking more from the federal government because the state is just getting its "fair share," noting Florida's long-standing status as a donor state that sends more money to Washington than it gets in return.

Crist kept his budget so secret that some of his agency heads had no idea what was in it.

Asked how the plan affected his agency, prison chief Walt McNeil said, "I have no idea."

Education Commissioner Eric Smith repeatedly said "I don't know" when asked whether Crist's plan included teacher bonus pay or whether Crist ran any county-by-county numbers showing how he proposes to increase per-student spending to $7,044.

Other highlights of Crist's spending plan include a salary freeze for state workers for the third year in a row; revival of the popular Florida Forever land-acquisition program for conservation; construction of 3,500 prison beds; and state acquisition of 55 miles of CSX rail line in Central Florida. He also wants to merge two state health agencies.

Crist appears to have spread the stimulus money everywhere. With it, he wants to buy police radios for prison guards, subsidize energy-efficient homes, aid the School for the Deaf and Blind in St. Augustine and even increase reimbursement rates for Medicaid HMOs, which have been cut year after year.

Rep. Ron Saunders, a Key West Democrat, was supportive.

"I think when you're in a crisis, you have to take extraordinary steps," Saunders said. "I think today was a good road map. The governor showed real leadership and courage in approaching this in a bipartisan way."

But his fellow Democrat, Sunrise's Sen. Nan Rich, said she worried about any budget plan that doesn't include significant revenue, either through the elimination of some tax exemptions or a cigarette-tax increase.

Without an infusion of reliable cash, Rich said, the state might rely too heavily on the stimulus money to prop up the Medicaid program serving 2.3 million poor, sick and elderly Floridians. Once the extra money runs out in two years, the state could be stuck with big Medicaid rolls and few funds.

"If we're not careful, we could fall off a cliff," Rich said.

The federal money couldn't arrive soon enough for the state's Medicaid budget, which is currently in deficit. The federal Medicaid money replaces state cash — about $900 million this year — which lawmakers can then spend in other areas of the budget. Next year, using the same method, lawmakers could have up to $1.5 billion.

But the year after that, the state could end up with an $817 million Medicaid deficit because the extra federal cash runs out, according to one legislative analysis.

The day before Crist rolled out his budget, Cretul and Senate President Jeff Atwater said they didn't want to increase yearly government programs with one-time money.

Crist brushed aside concerns about the stimulus package, saying he expects lawmakers will accept the stimulus money and his budget.

"I'm sure some will criticize it and that's fine," he said. "But I don't know how you go home and say, 'Well you know we got $12 billion from Washington, but I'm not going to give it to your kid for your school. Or I'm not going to spend it on your road that's congested in Broward County. Or I'm not going to let it be utilized for people who otherwise wouldn't have health care.' "

Times/Herald staff writers Alex Leary and Mary Ellen Klas contributed to this report. Marc Caputo can be reached at mcaputo@MiamiHerald.com.

Crist's proposed $66.5 billion budget relies on federal stimulus 02/20/09 [Last modified: Tuesday, February 24, 2009 3:38pm]

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