TALLAHASSEE — On Monday, Gov. Ron DeSantis used his veto pen to wipe away just over $1 billion from the state budget.
Gone are hundreds of millions of dollars in local projects, $135 million in education spending and other items, thanks to COVID-19 grinding the state economy to a halt.
Left are some of the governor’s top priorities — and a politically convenient budget that could spare Republicans from making unpopular decisions over the next six months.
Here are four takeaways from Florida’s budget.
1. It’s temporary. And it’s politically convenient.
The budget DeSantis signed is based on revenue projections state economists made before the coronavirus hit. In other words, the sharp decline in tax revenue from the pandemic makes it extremely unlikely that the state will have $92.2 billion to spend over the next 12 months.
Republicans and Democrats are both expecting to return to Tallahassee before the fiscal year ends to make additional cuts to this budget.
But when they return is the real question. Democrats want to return soon. Republicans want to wait until November, after the election, and when new leadership in the House and Senate takes over.
Perhaps the main reason Republicans want to wait: they want to avoid an ugly political battle in the Capitol over DeSantis’ coronavirus response, including the state’s ongoing unemployment troubles.
DeSantis’ budget doesn’t just potentially buy Republicans enough time until November. It also preserves some of DeSantis’ top priorities, including $500 million in teacher raises and millions in environmental spending, that please important voting blocs.
2. The cuts weren’t as big as some thought.
DeSantis warned that his vetoes would be extensive. On Monday, he claimed the $1 billion in vetoes was the largest ever by a Florida governor. (It’s not even close to the largest. Gov. Rick Scott vetoed nearly $12 billion when he axed the education budget in 2017, forcing lawmakers into a special session, for example.)
In reality, DeSantis’ veto list was smaller than many people expected.
“I thought it might be a little bit higher in vetoes,” said Kurt Wenner, vice president of research for Florida TaxWatch, a think tank that advocates for smaller government.
Republicans are waiting until August, when economists are expected to update their projections for the amount of revenue the state will receive for the current fiscal year.
If the state’s economy recovers faster than many expect, or if the federal government comes through with billions of dollars in aid for Florida, DeSantis’ cuts will be deep enough. If not, lawmakers can come back and cut more.
3. The state is leaning on the federal government. Is more money coming from Washington?
The COVID-19 outbreak has been devastating for Florida revenues. In just over three months, the state has already lost out on about $1.5 billion in tax money.
Congress anticipated this in March with the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. That $1.8 trillion bill gave broad authority to states, including Florida, to cover any unforeseen costs related to COVID-19.
Florida governments got $8.3 billion in all, with about $5.9 billion of that set aside for state operations. The state’s largest counties split the rest.
Whether that will be enough to make up for the state’s long term budget shortfalls is an open question. DeSantis has said he’s going to hold back about $750 million in state agency spending. He’s also noted the state has about $6.3 billion in reserves to dip into if necessary.
The state’s savings, in addition to the federal money, should get Florida through at least November. That’s when, with election season in the rear view, it will become politically safe to pass the kinds of longer-term spending cuts DeSantis hopes to largely avoid this summer.
Unanswered questions swirl around all of this. Some Democrats, for example, contend the governor is acting illegally as both a legislator and an executive in taking it upon himself to spend federal money. They’ve long called for a special session before November.
Then there’s the federal politics. DeSantis said Monday he would be “supportive” of additional help from Congress. A spokesman for Sen. Rick Scott, DeSantis’ predecessor, said the senator would not support such a “bailout.” Given the often dysfunctional environment in Washington, it’s unclear whether more federal help is coming to Florida.
4. DeSantis kept affordable housing money intact. Sort of. For now.
This was going to be the year for affordable housing advocates. For the first time in 13 years, the Florida Legislature kept the Sadowski Affordable Housing Trust Fund intact. Some $340 million set aside for affordable housing would actually go to affordable housing and not be diverted away for an unrelated purpose.
But then Monday, DeSantis vetoed a substantial portion of that affordable housing spending: $225 million set to go to the State Housing Initiatives Partnership (SHIP) program would not be spent, DeSantis decided. That money has been returned to the trust fund. The Legislature will decide what to do with it at a later date — probably, in a special session in November or later.
Despite that cut, advocates remain positive. DeSantis approved spending $115 million of the Sadowski funds on building affordable housing projects. And even DeSantis’ cuts were offset by the announcement of a quarter-billion dollars in CARES Act money, $240 million of which would go directly to rent and mortgage relief in Florida.
SHIP money does not normally go toward rent relief. Usually, the program, which runs through local governments, is used to improve housing stock and aid low income families in other ways. And unlike housing improvements, the federal CARES Act money has a hard expiration date: Dec. 31, noted Jaimie Ross, the President and CEO of the Florida Housing Coalition.
Ross lauded the governor nonetheless for prioritizing housing amid a pandemic.
“None of (the CARES Act money) had to be used for housing at all,” Ross said. “The No. 1 housing priority right now has to be to prevent people from being evicted. So I don’t think we can take any issue with the focus being preventing eviction.”