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Tough times could force Crist to tap reserve funds

TALLAHASSEE — Florida's continuing economic woes could soon prompt Gov. Charlie Crist to dip into either the state's post-hurricane recovery fund or its health care endowment to pay for state operations this year.

Since March, when state economists issued their last revenue estimate, monthly collections have been down $100-million each month, according to June revenue reports. Early reports suggest July will be no different.

Gov. Charlie Crist said Tuesday that he had been briefed by his staff about current revenue declines and that he's prepared to dip into reserves.

"If that's what's necessary, we need to be prepared do that," Crist said.

Crist has shown no appetite, in an election year, for another option: to call a special session of the Legislature to either cut spending or raise additional revenue.

On Aug. 15, economists will release a new estimate of the state's revenue for 2008-09. So far, collections of sales, corporate income and document stamp tax on real estate transfers are all down significantly through June.

Anticipating such a crunch, the Legislature earlier this year gave the governor the power to dig into two state funds that have more than $3-billion to cover deficits for the fiscal year that began July 1.

One fund, the Budget Stabilization Fund, was created in the wake of Hurricane Andrew so the state might have money to operate after a disaster. The second, the Lawton Chiles Endowment, was created with proceeds from the state's tobacco company settlement and has been earmarked for health care in the past.

Across the nation, states ranging from California to New York are facing multibillion-dollar budget shortfalls.

Florida is well into its second, and unprecedented, year of revenue declines.

In May, lawmakers approved a $66.2-billion budget for 2008-09, which was almost $6-billion lighter than the budget they approved a year earlier.

Crist also anticipated worsening economy. The day after he signed the current budget, he ordered all state agencies to reduce spending by another 4 percent in response to sluggish tax collections.

Tough times could force Crist to tap reserve funds 08/05/08 [Last modified: Wednesday, August 6, 2008 1:45pm]

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