Gov. Charlie Crist's budget proposal sounds like a return to the good old days. More money for schools and health care. No new taxes or layoffs. There's even money for new prison guard radios. What economic hard times? Then the fine print explains why it's too good to be true and why the governor's optimism is a close relative to denial.
Crist wants to rely heavily on federal stimulus dollars and other one-time monies to maintain, and in some cases expand, recurring state programs. Rather than looking for substantial new revenue or further reordering the state's spending priorities to assure a more sustainable future, he would burn through the federal cash and state reserves and hope for a quick economic recovery. He is willing to raise car registration fees, but he is not willing to take on the corporate lobbyists and close sales tax exemptions.
This approach would prevent short-term pain, but it would exacerbate long-term problems. There are ways to wisely use the stimulus money, and Crist was smart to embrace the federal package. But the Legislature should set the governor's budget plan aside and take a more sensible approach that combines federal stimulus spending, limited program cuts and new state revenue sources to broaden the tax base.
Crist's $66.5 billion budget plan for 2009-10 depends on optimistic assumptions, including that Florida will receive up to $6 billion for education from the federal stimulus act. That's hardly a sure thing, since the federal law requires states to at least keep education spending at 2005-06 levels — which Florida has failed to achieve. That could mean just $2.5 billion flows to Florida over two years. Also, Crist assumes the Legislature will finally approve a gambling compact with the Seminole Indian Tribe, netting $288 million in the first year. That's not a sure thing, either.
But the biggest gamble of Crist's budget is that Florida's economy and its tax revenue will fully rebound by the time the federal stimulus money dries up in two years. As daily headlines attest, that's far from a sure thing. But Crist does not prepare for a slower recovery. He uses one-time funds to cover 12 percent of the cost of the state's recurring programs, from public schools to social services. He borrows money for new prisons and spends too much on an Orlando area commuter rail project. He uses none of the federal stimulus money to stave off a $700-million raid on the Lawton Chiles Endowment, which is supposed to serve as a long-term source of money for children's programs and health care.
Crist's proposal is an expansion of the same irresponsible scheme lawmakers employed in the January special session to balance the current state budget without considering new taxes. They raided the state's savings accounts — including the Chiles endowment — to cover nearly 9 percent of the state's ongoing costs. Crist's plans would increase that use of one-time monies to four times the 3 percent limit voters set in a 2006 constitutional amendment.
If Crist is wrong, and the economy hasn't rebounded fully within two years, Florida's economic crisis will be longer and more acute. The state's reserves and federal help will be gone, and Florida will have done nothing in the interim to prepare.
Florida should wisely use the federal stimulus money to boost Medicaid, extend unemployment benefits, and build roads and other capital projects. The money is intended to stimulate the economy and help those most in need, not enable the state to put off tough budget decisions. Lawmakers need to continue to consider new revenue sources, such as a cigarette tax increase, elimination of some sales tax exemptions and closure of corporate tax loopholes. They need to continue to root out waste and make government more efficient. And they need to take a much longer view than the governor.