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State budget deal cuts schools, health care and leaves $400M in the bank

TALLAHASSEE — Florida's hemorrhaging budget was all but patched up Sunday morning when legislative leaders agreed to cut enough spending and raid enough savings to leave the state about $400-million in the black — at least for now.

The budget agreement slashes about $1.2-billion in spending and takes about $1.6-billion from special savings and spending accounts.

Overall, the budget cuts are biggest for schools across the state: about $500-million from K-12 education. Schools, which make up half of the part of the state budget that's in deficit, will lose about $140 per student in spending.

Health care is the second-largest component of the general revenue budget and received a nearly $200-million cut.

The deal sets the stage for a Wednesday budget vote as well as an early end to the two-week extra lawmaking session.

During weekend negotiations, legislators spared some of the deepest cuts from nursing homes, affordable housing, hospitals, prisons and drug treatment programs.

The state's two children's hospitals, All Children's in St. Petersburg and Miami Children's, were exempted from cuts.

Legislative leaders said they came up with the $2.8-billion plan that banks $400-million because they wanted enough cash at the ready in case the economy keeps tanking.

That's a likely scenario. The economy shows little sign of improving. The special session was called to close a $2.3-billion deficit — but it grew by $100-million when the session began.

Courts fared well because lawmakers agreed to raise traffic fines to raise more revenue. Democrats, who had been calling for more state revenues throughout the session, initially protested the traffic ticket plan as draconian.

Republicans say they'll consider plans to raise cigarette taxes, increase gambling taxes or close tax loopholes during the regular spring lawmaking session.

Road programs fared best in the budget plan Sunday when the House agreed to spare the state's transportation trust fund completely from a $200-million cut it proposed.

A housing trust fund was cut by $190-million, a gash that is $85-million less than what the House sought.

But the Lawton Chiles Endowment Fund for poor kids and seniors faces a $700-million cut. That could virtually drain it, said Senate budget chief J.D. Alexander, a friend of the former Democratic governor.

He said the final budget language will try to hold off slashing the Chiles endowment until June 15. The fund is supposed to be partly reimbursed in case federal stimulus money reaches Florida.

Alexander pledged that the budget has virtually no sneaky language — called "proviso'' — that special interests often use to control state spending in their favor.

Alexander said the budget chiefs almost hid from lobbyists during their negotiations.

"I believe we did a yeoman's job making sure that special interests didn't get their stuff in," Alexander said Sunday.

But lawmakers of both parties acknowledge that this budget-cutting deal doesn't solve the state's long-term problems. Next year's budget deficit is projected to be anywhere from $2.5-billion to $4-billion, depending on what revenues are available and what programs will be funded.

The lone Democrat to attend the Sunday morning budget meeting, St. Petersburg's Darryl Rouson, called the final product "a bad budget." But Rouson praised his Republican colleagues for making thoughtful cuts in an above-board manner.

"The least amongst us is spared something," he said. "Everyone is touched by this crisis."

Rouson successfully fought a proposed cut to substance-abuse prison treatment beds. The Legislature will cut $3-million, instead of $7-million. That means the 415 treatment beds in Rouson's district will be largely untouched.

The Senate backed off its proposal to cut 391 Department of Corrections jobs when the House proposed a reduction of 129 empty positions. The Florida Department of Law Enforcement, facing layoffs as well, shouldn't have any either, said lawmakers.

But seven Parole Commission employees might lose their jobs — as could a handful of support staff for one of the state aircraft, which is being eliminated for a savings of about $100,000.

Lawmakers also agreed on a plan to spare nursing homes from a 10 percent cut in Medicaid reimbursement rates. That proposal slaps a 5.3 percent fee on homes' revenue to draw down a larger pool of federal money for a total of $166-million — enough to make up the cuts to nursing homes in all of 2008.

Teaching hospitals and large Medicaid providers were allowed to use local tax money to supplement the loss of state tax money. That could reduce the total statewide cut — originally estimated at $137-million — to about $57-million.

Times/Herald staff writer Steve Bousquet contributed to this report.

State budget deal cuts schools, health care and leaves $400M in the bank 01/11/09 [Last modified: Monday, January 12, 2009 8:46am]
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