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Florida, this budget session could hurt some

TALLAHASSEE — Florida legislators will start the new year in familiar fashion: by cutting aid to schools and other programs, borrowing money, skimming cash surpluses and hiking traffic and court fees to patch a $2.3-billion hole in a leaky state budget.

The special session that begins Monday marks the third major round of cuts in 10 months and is the result of a prolonged nosedive in tax revenues caused by the recession-racked real estate and credit markets.

Barred by the state Constitution from deficit spending and firmly opposed to new taxes, the state's Republican leaders are in a budgetary corner, forced to further constrict spending.

"Times are bad for Floridians," said Senate Majority Leader Alex Diaz de la Portilla of Miami. "We're going to have to make decisions here that no one will really like."

The next series of budget moves is probably only a stop-gap measure and a prelude to what's seen as a bleaker regular session in March, when about $4-billion more in budget cuts will be needed to balance next year's budget. Also due in March is a new revenue estimate that is expected to show continued flat-lining of Florida's economy.

"Tough times require tough decisions," House Speaker Ray Sansom, R-Destin, told his colleagues in a memo. "They are the choices we must make."

Gov. Charlie Crist has outlined a plan to cover the deficit with a combination of spending cuts and borrowing from state trust funds supposedly reserved for particular programs.

The session is a test for an ideology championed by such GOP icons as Ronald Reagan and Jeb Bush that government is the problem, not the solution.

The state budget of $66.3-billion is about $6-billion less than it was a year ago, the largest year-to-year drop in state history. To fiscal conservatives, the current budget crisis is really a budget correction. In percentage terms, state spending rose by double digits from 2005 to 2007, and now it's decreasing at a similar rate. To some Republicans, that's worth celebrating.

"It's easy to talk about being a conservative when there's enough money to pay for everything. Now it's time to act like conservatives," said Rep. Paige Kreegel, R-Punta Gorda.

But with unemployment in Florida at a 15-year high, Medicaid rolls booming and 10 percent of the population subsisting on food stamps, Democrats and some moderate Republicans argue that cutting government services will only make things worse.

"We're talking about severe budget cuts," said Rep. Ron Saunders, D-Key West. "These are going to have major impacts on people."

Democrats say the state's budget woes prove the tax system is inadequate. They want to consider increasing revenue into state accounts with such things as a cigarette tax hike of up to $1 a pack.

Republicans specifically took that issue off the table for the short session, but will consider increased fines on civil and criminal court filings and traffic violations to minimize the impact on courts, prosecutors and public defenders.

The goal, said Sen. Victor Crist, a Tampa Republican who oversees justice spending, is to scrape together enough money to "keep the courthouse doors open and the prison gates shut."

Democrats are in a combative mood. They're bashing the Republican plan to raise court fees as a tax on the "little guy," and they say Republicans have cobbled together the rough outlines of a budget deal before ever walking into the Capitol.

"You can anticipate us being a bit more contrary because we weren't involved in the decisions that were made," Saunders said.

The session serves as a trial by fire for the Legislature's newly installed leaders, Sansom and Senate President Jeff Atwater, R-North Palm Beach — two men in sharply different political orbits.

Atwater, a 50-year-old bank executive, has empaneled a special committee to study the Florida economy and tax system and has advocated the need for long-range solutions.

Sansom, 46, has stayed out of sight since taking over, shadowed by controversy over his role in steering millions of dollars in public money to a hometown college that awarded him a $110,000 job. As he faces a possible ethics investigation, more than a dozen newspaper editorial boards have called on Sansom to resign the college job or forfeit the speakership.

The bleak condition of Florida's finances also strains the unwavering optimism of Gov. Crist as the state's chief executive begins the second half of his term.

Crist wants lawmakers to blunt the impact of the cuts by raiding savings accounts and trust funds and by borrowing in the hope that the economy will improve, even though the state's revenue experts say an uptick is unlikely before 2010.

The governor's proposal calls for making permanent a 4 percent cut in state agencies' budgets, at a savings of $562-million. The Legislature, though, might increase the agency cuts to nearly $1-billion, but it's unclear what else would be cut. To avoid those deeper cuts, Crist's plan calls for heavy borrowing plus raiding savings. Specifically, Crist recommends: spending $320-million in surplus cash; bonding about $300-million for prison building; and borrowing $600-million and $290-million, respectively, from a health care fund and a budget stabilization fund.

All those maneuvers still won't spare K-12 public schools from taking a $370-million hit. Education accounts for about half of the state's budget supported by general taxes, the source of the deficit.

Crist is also banking on a jolt of aid from President-elect Obama, but many Republicans in Congress oppose Obama's plan to distribute federal aid to states.

Moreover, Crist's brand of patchwork budgeting concerns key senators, who say the governor's approach to paying for recurring, year-to-year services with one-time savings is unwise and an example of Crist's short-term vision.

"I believe it is imperative that we plan for the future by reducing the state's recurring spending to ensure that we are not back at the table with the same problem in the spring," said Sen. JD Alexander, the Winter Haven Republican and the Senate's chief budget-writer.

The gathering in the Capitol that starts Monday is the third special session in the past year and a half, at an estimated cost of about $40,000 a day, though lawmakers haven't updated that estimate in several years.

Saunders, ranking Democrat on the House Budget Committee, has been through budget-cutting sessions before, in the early 1990s, when Florida was in the throes of another recession and his party was in control.

Noting the bad-news element of legislators slashing services, Saunders said: "There's nothing good that can happen. You want to get it over with as quickly as possible and get out of town."

Steve Bousquet can be reached at bousquet@sptimes.com or (850) 224-7263.

Florida, this budget session could hurt some 01/03/09 [Last modified: Wednesday, January 7, 2009 4:52pm]
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