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Crist freezes $800 million in state spending

TALLAHASSEE — As Florida's finances continue to unravel, Gov. Charlie Crist froze 15 percent of state spending on Thursday for the rest of this budget year.

The effect is to hold back about $800 million that already cash-strapped agencies were expecting to pay their bills for the rest of the budget year ending June 30. State Education Commissioner Eric Smith told school districts that they will continue to get all of their money through early May.

Crist's budget office called the move "precautionary" and said the withheld money could still be released as federal economic stimulus checks arrive. But it was the latest instance of Crist's optimism-fueled approach running headlong into Florida's economic reality.

Schools and state agencies have already had 4 percent of their money cut, and plans are being drawn up for much deeper cuts next year.

"This budget, we're just in total dysfunction," said Sen. Dan Gelber, D-Miami Beach. "We cannot do across-the-board cuts. It means we're not prioritizing education and health care over everything else."

Republicans praised Crist for the move and said they were confident Florida would get all of the stimulus money. About $817 million in federal money is already available.

Crist's holdback announcement had been rumored for at least two days, and it was announced two hours after he suggested that no such move was being considered. It capped a day in which state senators began drawing up a hypothetical doomsday budget for next year.

The Senate has begun what it calls an "exercise" in which all agencies are asked to plan for cuts of from 10 to 20 percent in next year's budget. What senators heard Thursday was a long list of horror stories: a 20,000 wait list for early childhood education, 70 state trooper layoffs, early-inmate releases and elimination of payments for eyeglasses, dentures and hearing aids to nearly 60,000 poor elderly adults.

"These cuts are somewhere in between malfeasance and malpractice," said Sen. Durell Peaden, R-Crestview, who oversees health care spending.

Corrections Secretary Walt McNeil said he would consider releasing inmates, closing prisons or taking other steps that could be end up being challenged as unconstitutional.

Hearing that, Sen. Frederica Wilson, D-Miami, said: "We're going to have serious safety consequences of safety, recidivism and riots."

By next Friday, senators will roll out their first formal budget proposals that are expected to reflect cuts in all areas. The Senate might also propose new increases in fees and taxes, including tax hikes on cigarettes and alcohol and expanding gambling. Lawmakers are also considering pay cuts to more than 100,000 state workers.

Republican Sen. Thad Altman of Melbourne said the tough-cuts budget is partly being done to make the case for possible tax increases.

"The consensus up here is, before we start looking at new revenue, we need to have a reality at hand about what cuts are taking place," Altman said. "We need to get a clear picture of the impact of the cuts."

As the latest bad budget news travels downstate, it will cause a chain reaction of more bad news. On Thursday, Brad King, the state attorney for a five-county district that includes Hernando, warned employees of possible two-week unpaid furloughs to absorb the holdback.

The growing problem facing Crist and legislators is that stimulus money will patch only about half of the state's current budget deficit of about $6 billion, and the money may not arrive as soon as hoped. Crist's budget director, Jerry McDaniel, said it's taking longer than expected to get a federal waiver that will release education stimulus money to Florida because the state is spending less on education than it did three years ago. He said the holdback should not endanger the waiver request.

Ever since state economists and budget analysts forecast an estimated $3 billion budget hole next year, Crist has steadfastly dodged the question of whether he would support higher taxes or fees. "I would prefer that we not," Crist said Thursday. As for any more cuts, "I want to make sure that they're compassionate, that they're fair, that they do take care of the most vulnerable among us, that we try to hold education harmless," he said.

"You might want to ask him where he's going to get the cuts from," said the Senate budget chief, Republican J.D. Alexander of Winter Haven. "There's no free ride."

Thursday's developments underscored how Crist hates to be the bearer of bad news. His budget director issued the holdback news as an e-mail after the governor had held two public events with the media present, including one hailing the state's stimulus Web site, www.flarecovery.com.

As he left a meeting at noon with film industry officials who want more state money for incentives, Crist was asked whether he was planning to order "additional holdbacks, maybe of as much as 15 percent." His answer: "Not that I've been briefed on."

Times/Herald staff writers Shannon Colavecchio, David DeCamp, John Frank, Breanne Gilpatrick, Amy Hollyfield, Alex Leary and Donna Winchester contributed to this report. Steve Bousquet can be reached at bousquet@sptimes.com or (850) 224-7263.

On the Web

Read the memorandum on the 15 percent holdback by Gov. Charlie Crist's budget director Jerry McDaniel and the Florida Department of Education's response at links.tampabay.com.





The budget memo

Read the memorandum on the 15 percent holdback by Gov. Charlie Crist's budget director Jerry McDaniel and the Florida Department of Education's response at
links.tampabay.com.

Crist freezes $800 million in state spending 03/19/09 [Last modified: Friday, March 20, 2009 4:03pm]
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