Make us your home page
Instagram

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

State's budget gap could be nearly $5 billion

TALLAHASSEE — The magnitude of Florida's fiscal crisis became clearer Thursday as the Senate's top budget writer called for larger cash reserves to pacify Wall Street bond rating firms.

Sen. J.D. Alexander, R-Lake Wales, told members of the Senate Budget Committee that the state should sock away $2.4 billion in reserves next year, a figure equal to 10 percent of what's raised from general taxes, to meet a guideline he said Wall Street looks for from states.

"If we have to pay more for our bonds," Alexander said, "it's going to cost us a lot more. Credit rating is important for us."

When added to the existing shortfall, the state's new budget gap is $4.8 billion.

Florida borrowed heavily over the past decade, mostly for major construction projects at colleges and universities, and total state debt ballooned to $28 billion. The state pays $2.1 billion yearly in debt payments.

The current state budget has about $1.2 billion in reserves that could be carried over to next year's budget, so another $1.2 billion would need to be put in the bank. When added to the existing shortfall of $3.6 billion, you get $4.8 billion.

Gov. Rick Scott confirmed the approximate figure.

In banter with Scott, a reporter offered to lose weight based on the difference between Scott's budget proposal and the state's current $70.4 billion budget.

Scott, a fitness buff with a history of dealmaking in the business world, made the reporter a counter-offer that suggested his budget proposal would be $5 billion less.

The existing shortfall of $3.6 billion is due to a combination of factors, including tepid tax collections during the recession, a disappearance of federal stimulus money and expanding Medicaid rolls.

Senators said the bleak picture will necessitate deep cuts and policy shifts, such as shifting most of the state's 3 million Medicaid recipients into managed care plans, forcing state workers to pay part of their retirement benefits, reducing the size of the state work force and tightening state oversight of 15,000 contracts with private vendors.

Education and health care together account for nearly two-thirds of the budget, with the state now spending about the same amount for Medicaid as it does for all education programs: $22 billion.

"The bottom line is, Medicaid has hijacked the rest of the budget," said Sen. Joe Negron, R-Stuart.

The Republican majority on the budget committee quickly ruled out tax or fee increases as an alternative to cutting programs.

Sen. Nan Rich, D-Weston, leader of the dozen Senate Democrats, said lawmakers should consider closing tax loopholes or taxing Internet sales.

She warned of the unintended consequences of cuts in human services, especially mental health and substance abuse treatment, that could wreak havoc on families and result in more poor children being shuffled into foster homes.

"I just feel we have to find a better way," Rich said.

Alexander, an acknowledged budget expert who's in the final two years of a 14-year legislative career, despaired of the news that awaits Florida's 126,000 state workers.

"I did not run for office to tell state employees we want to cut your pay and benefits," he said, "but we are where we are."

Scott will submit budget recommendations to the Legislature on Feb. 7, but lawmakers traditionally do not pay much attention to the governor's proposals.

After that, the next major development in the budget crisis is an update of the state's revenue picture, scheduled for mid March.

Times/Herald staff writers Michael C. Bender and Katie Sanders contributed to this report. Steve Bousquet can be reached at bousquet@sptimes.com or (850) 224-7263.

State's budget gap could be nearly $5 billion 01/27/11 [Last modified: Thursday, January 27, 2011 9:36pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. 'Road to Nowhere' is back: Next phase of Suncoast Parkway coming

    Roads

    Despite intense public opposition and dubious traffic projections, the Florida Department of Transportation has announced that construction of the toll road known as "Suncoast 2" is expected to start in early 2018.

    The Suncoast Parkway ends at U.S. 98 just south of Citrus County. For years residents have opposed extending the toll road, a project dubbed the "Suncoast 2" into Citrus County. But state officials recently announced that the Suncoast 2 should start construction in early 2018. [Stephen J. Coddington  |  TIMES]
  2. Jameis Winston's hardest lesson: He can't always save the day

    Bucs

    TAMPA — Ever wonder what in the world goes through Jameis Winston's mind when he tries to fit the ball in a keyhole as he is being dragged to the turf like he was during Thursday night's 12-8 preseason win over the Jaguars?

    Jameis Winston, left, tries to hang on to the ball as Jaguars defensive end Dante Fowler tries to strip it from him.
  3. Despite pain, woman in court faces ex-boyfriend who lit her on fire

    Criminal

    PORT RICHEY

    Sheron Pasco sat in the wheelchair as her mother pushed it toward the man in the orange jail suit.

    Sheron Pasco, 39, relies on the help of her mother, Tranda Webb, 62, as she recovers from the burns covering her body.
  4. Florida starter under center still under wraps

    College

    GAINESVILLE — With two weeks before Florida opens its season against Michigan, the Gators' three-way quarterback battle remains wide open.

    Luke Del Rio, right, is in the mix to start against Michigan in the season opener … as is Malik Zaire and Feleipe Franks.
  5. A sports rout on Wall Street

    Retail

    NEW YORK — Sporting goods retailers can't shake their losing streak.