Like other states, Florida is facing billions in lost tax revenue because of the coronavirus pandemic. Unlike other states, Gov. Ron DeSantis and legislative leaders are not ringing alarm bells or revealing how they intend to respond. But painful spending cuts are on the horizon, and the sooner there is a clear direction and a frank public debate about recalculated priorities, the better.
DeSantis has been stalling, playing like a basketball team holding the ball and running down the clock. He acknowledges he has not formally accepted the $93.2 billion state budget for 2020-21 that the Florida Legislature approved in March. His strategy is logical. DeSantis wants to see how much money Congress sends the states in another aid package to offset costs tied to the pandemic before he decides how deeply to slash spending through budget vetoes.
For a Republican governor with strong ties to the Trump administration, it’s a tricky political calculation. The president and congressional Republicans, including U.S. Sen. Rick Scott, are bashing the Democratically controlled U.S. House’s proposed aid package. Senate Majority Leader Mitch McConnell has ridiculously suggested some states should be allowed to declare bankruptcy, and other Republicans in Washington are blathering about bailouts even though it is the federal government that left the states to largely fend for themselves in this unprecedented pandemic.
Regardless of the intraparty intrigue, the clock is ticking. There are just two weeks left in May, and the new state budget kicks in July 1. With several billion dollars in reserve, the state can make it until then even though it easily has spent more than $1 billion in unanticipated costs tied to the pandemic. But public school districts, universities and countless agencies that rely on state money are taking steps now to reduce spending in the new budget year without real direction from Tallahassee. Some clarity would be good.
The first meaningful numbers will come from DeSantis’ budget vetoes, which could be north of $500 million but short of $1 billion. For political and practical reasons, it’s unlikely the governor would kill the significant teacher raises he pushed for and the Legislature embraced. More likely to face deep cuts are environmental initiatives, affordable housing and all of those local projects lawmakers tucked away. But the money saved by the budget vetoes won’t come close to filling the budget hole created by the pandemic.
How deep will the hole become? The early signs aren’t good. Sales tax revenue, which represents more than 75 percent of the state’s general revenue, was down more than $770 million in March. Expect April to be worse. Gas taxes that help pay for roads and other tax sources also are expected to be down as Floridians complied with stay-at-home orders.
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The pandemic has created a dual budget challenge: As tax revenues are declining, expenses are rising. The state expects to spend an additional $1 billion or more on Medicaid in the coming year as enrollment rises because of job losses. Public and nonprofit hospitals will need hundreds of millions to cover their coronavirus-related expenses. School districts will have added expenses for technology tied to virtual learning and for protective measures when students return to campus.
Absent political calculations, Congress would promptly approve aid to the states and the governor would call the Legislature into special session this summer to re-write the 2020-21 budget. That would give more time to spread the pain over the budget year. But of course, there are political calculations. Republican lawmakers already have rejected calls by Democrats for a special session, and they would like to avoid a public airing of spending cuts and issues such as the dysfunctional unemployment claims system before the election. That is not the most financially responsible approach.
Yet there is a reasonable argument that these tough budget discussions should be put off if possible until after the November elections. Then lawmakers on their way out won’t be involved, and the effort can be directly led by the new legislative leaders, incoming House Speaker Chris Sprowls of Palm Harbor and incoming Senate President Wilton Simpson of Trilby. Perhaps Sprowls and Simpson could provide some informal but public guidance to universities, school districts and local governments this summer when the economic projections are clearer. The longer spending cuts are delayed, the deeper the cuts will have to be to balance the state budget as required by the Florida Constitution.
Here’s what should not happen: The governor should not pull a power play and attempt to orchestrate budget cuts and a redirection of spending on his own under the guise of a declared state of emergency. He also should not avoid a legislative special session by seeking approval of his budget changes through the Joint Legislative Budget Commission, comprised of just 14 state lawmakers. The commission is designed for making long-range projections and dealing with minor spending adjustments during the year, not such a substantial re-write of a state budget involving billions of dollars and affecting millions of Floridians. All 160 legislators representing constituents in every corner of the state should have a voice.
It’s not a question of whether Florida will feel additional economic pain from the pandemic that will significantly impact government services and public policy. It’s a question of how much and when. The smartest approach is to prepare for the worst, hope for the best -- and start tightening the belt now.
Editorials are the institutional voice of the Tampa Bay Times. The members of the Editorial Board are Times Chairman and CEO Paul Tash, Editor of Editorials Tim Nickens, and editorial writers Elizabeth Djinis, John Hill and Jim Verhulst. Follow @TBTimes_Opinion on Twitter for more opinion news