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Florida expects $6 billion hole in budget in 2011

TALLAHASSEE — The oil rig explosion that threatens the Gulf of Mexico also rocked the carefully crafted agenda of the Florida Legislature's incoming leaders.

Rep. Dean Cannon and Sen. Mike Haridopolos had envisioned using oil drilling leases off Florida's gulf coast to fill a $6 billion budget hole expected next year. But as the oil slick washed closer to Pensacola, Cannon — on tap to be the next House speaker — conceded: ''I think it definitely is a game changer."

Legislators closed out their 60-day session Friday with a $70.4 billion budget and fears that next year's financial picture will be worse.

More than $15 billion in federal stimulus aid for Florida over three years will disappear in 2011, leaving gaps in programs that finance schools and health care for the state's poor and elderly. Meanwhile, the state's property insurance market and the state-backed Citizens Property Insurance Corp. remain vulnerable to a major storm, and Florida's budget-sapping Medicaid program continues to grow.

"It's going to be a tough year ahead," said Haridopolos, R-Indialantic, the incoming Senate president. "We're going to have less money with the loss of the stimulus money, and more than ever my conservative credentials are going to be put to the test."

Haridopolos took pride in helping steer the Senate to the right this session — during an election year — by pushing through a teacher tenure bill, stricter abortion laws, ballot measures aimed at rejecting federal health care reform and pushing for a balanced federal budget, and a redistricting amendment that would shift the impact of two citizen-backed redistricting plans.

But the Republican-led Legislature relied on $2.6 billion in federal stimulus money to fill its $3 billion budget hole. Lawmakers left for next year the job of finding more permanent solutions to Florida's budget woes.

Cannon, R-Winter Park, called this year's budget a "major victory" but warned: "We have no assurance we're going to be able to do that again next year because the federal stimulus money probably will not be available and the economy doesn't look like it will recover quickly enough to close the gap."

Adding to their concern: The federal health care overhaul approved by Congress is expected to expand Florida's Medicaid rolls by at least 1 million people over the next couple of years.

With 2.7 million Floridians already receiving Medicaid coverage, and the state at record unemployment levels, the state's share of the costs are expected to climb. Although federal dollars will cover the expansion's early stage, forecasts indicate Medicaid will absorb more than one-third of the state budget by the end of the decade.

"If we don't make some significant reform, it will literally eclipse the budget in a number of years," Cannon said.

He and Haridopolos vow to bring back the ambitious Medicaid overhaul that legislators tried but failed to pass this year.

The Senate wanted to find savings by expanding managed care to 19 counties in one year while the House sought to expand the program to all 67 counties within five years.

The Medicaid revamp, like the oil drilling plan, was never expected to provide an immediate fix to the state's budget woes but would have begun a series of gradual changes that could have lasting effects.

"We started the conversation, and we'll be back next year," said Rep. Denise Grimsley, R-Lake Placid, chairman of the House Health Care budget committee, and an architect of the House Medicaid plan.

Gov. Charlie Crist may give legislators another chance this year to tackle all the unfinished business.

He has threatened to veto the abortion bill, a property insurance bill and large chunks of the budget, such as a $160 million raid on the road building fund. He also has suggested that he may bring lawmakers back into special session to take up anti-corruption bills and ethics reforms aimed at the Public Service Commission.

Crist, who declared last week that he will abandon the Republican Party and run for the U.S. Senate as an independent, antagonized legislators earlier this session by vetoing a teacher tenure bill and a bill giving legislative leaders new political campaign funds.

Senate President Jeff Atwater, who is running for a seat as the state's chief financial officer, said he is "open to" a summer special session to take up ethics, corruption and PSC reforms.

Rep. Ron Saunders, D-Key West, blames election-year politics for the lack of progress on many tough issues.

"Next year's not an election year and, after the elections, we'll see where the state is," he said. "Hopefully, we'll be able to start working together because next year we've got a deficit that is twice as bad as this year's and not as much money."

And with less money, oil drilling may not be completely dead. After a year of studying the prospects of safe oil drilling by a committee Cannon chaired, neither Cannon nor Haridopolos is willing to abandon the prospect for Florida.

"I'm not going to move forward until every single question has been answered," Haridopolos said, noting the spill is a once-in-40-years disaster.

Times/Herald staff writers Lee Logan and John Frank contributed to this report. Mary Ellen Klas can be reached at meklas@MiamiHerald.com.

2010 session:

Crist, McCollum, Sink

Here's how the state's top three politicians fared on their major proposals:

Gov. Charlie Crist
Gambling

compact
The governor signed a $1 billion gaming deal that gives the Seminole Tribe exclusive rights to operate Vegas-style slot machines outside South Florida for the next 20 years. The state will receive $435 million this year and at least $1 billion over the next five years. PASS
Economic incentivesThe governor proposed a 1 percent corporate income tax cut and a 10-day back-to-school sales tax holiday. Budget writers ignored the tax cut suggestion and trimmed the school sales tax holiday to three days, Aug. 13-15. FAIL
Florida

Forever
Crist wanted $50 million to revive the program, which buys lands for conservation. Lawmakers approved $15 million. COMPROMISE
Attorney General

Bill McCollum
Attorney's

fee caps
This top priority, already signed into law by Gov. Crist, puts a $50 million cap on legal fees for lawsuits handled by private lawyers on behalf of the Attorney General's Office. PASS
Health care lawsuitA controversial provision that bolsters the attorney general's lawsuit against the federal government by allowing him to sue on behalf of individuals won last-minute approval in a larger abortion bill headed to the governor. PASS
Debt

collectors
After his office received numerous complaints, McCollum sought to crack down on rogue debt collectors. The legislation awaiting Crist's signature expands the office's ability to pursue questionable debt relief services. PASS
Chief Financial Officer

Alex Sink
Safeguard Our Seniors ActA measure to toughen fraud laws against scammers who target senior citizens won approval after two years of stalemate. It increases the penalty for manipulating annuities and gives the Department of Financial Services more enforcement tools. PASS
Firefighter death

benefits
The CFO, who doubles as the state fire marshal, pushed the Legislature to pass a bill that gives death benefits to the survivors of firefighters killed during training. PASS
State

Board of Administration
Lawmakers approved a package of measures to provide greater oversight of the embattled agency that handles state investments. But an expansion of the governing board, a top priority, isn't included. COMPROMISE

John Frank, Times/Herald Tallahassee Bureau

Florida expects $6 billion hole in budget in 2011 05/01/10 [Last modified: Saturday, May 1, 2010 8:47pm]
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