Crist makes budget recommendations as revenue drops

Local officials have been bracing for another round of budget cuts for several weeks. They now know how Gov. Charlie Crist is looking at the situation.

On Dec. 23 Crist sent a letter to Chief Justice Peggy Quince, Senate President Jeff Atwater, Speaker of the House Ray Sansom, and Budget Committee Chairmen Ken Pruitt and David Rivera noting the results of the recent revenue estimating conference and laying out recommendations on budget action in the coming special session of the State Legislature.

Crist said the funding gap for the 2008-09 fiscal year is now estimated at $2.315 billion based on declining state revenue and adjustments for Medicaid enrollment increases. Crist noted that the state constitution requires a balanced budget, and made the following recommendations to meet that requirement:

•Reduce spending by $56.1 million, including “holding harmless” delivery of direct services to the Health and Human Services budget and limiting reductions to the K-12 school budget to the four percent holdback level announced in June 23.

•Use $325.3 million is available reserve balances from a wide variety of sources. Trust funds use money from designated revenue sources for specific purposes such as gasoline taxes for roads and utility taxes for education construction

•Bond current year prison construction costs, meaning issuing $314 million in bonds for prison construction versus take it out of the budget.

•Use Seminole Indian Gaming Compact Funds of $135 million, a move Republican members of the legislature generally oppose. “In order to use these funds, I urge your quick action on the compact between the State of Florida and the Seminole Tribe of Florida,” Crist wrote in his letter.

•Use $290 million in additional budget stabilization fund reserves.

•The most controversial recommendation is to borrow $600 million from the reserves of the Lawton Chiles Trust Fund endowment. The fund was started from money obtained from the $11.3 billion tobacco settlement. A considerable amount of the tobacco settlement money has gone to other budget purposes, and Chiles’ son, Lawton Chiles III, was strongly critical of Crist’s recommendation to use the fund in the Dec. 23 Panama City News-Herald.

Crist said one object of the recommendations is to avoid layoffs of state employees, as well as raising taxes, but local governments are still awaiting possible further cuts and their effect on county services. Board of County Commission Chairman Bill Howell noted that there is no free ride if residents want tbhe level of services to remain where it is.

“The County has needs,” Howell said during a discussion of impact fees. “Nobody wants to pay more taxes, but if you want services you have to figure out some way to pay for them.”