Latest News

Fla. uses reserves, tobacco money for budget hole

TALLAHASSEE — Florida lawmakers completed a plan Sunday to plug the state’s at least $2.3 billion budget hole by taking more than half of the money the state has in last-resort reserves and up to $700 million the state has from a settlement with the tobacco industry.

Both details had been sticking points in House and Senate negotiations at the state Capital. The cuts take $400 million from reserves, leaving the state with about $250 million, the lowest amount of reserves it has had in more than ten years. In addition, the approximately $1 billion tobacco endowment could be drained by more than two-thirds. Lawmakers hope to repay at least part of what they take with money from the federal government.

Leaders of the budget negotiations did agree Sunday not to take any more money out of spending on transportation to fill the budget gap. House lawmakers had wanted to strip more than $200 million from spending on roads, airports and other transportation construction to cover shortfalls in other areas. But Senate lawmakers balked, saying that money would help stimulate Florida’s economy and create jobs.

Lawmakers also agreed to take $190 million from a trust fund that helps provide affordable housing.

Lawmakers had also differed on whether to offset just the current $2.3 billion shortfall or have on had more money in case the state’s finances worsen before the end of the budget year on June 30. On Sunday lawmakers agreed at least a $400 million cushion in case the state’s finances worsen.

“Clearly these are historic cuts,” said Sen. J.D. Alexander, R-Winter Haven, who chairs the Senate’s budget committee. “This is a very challenging period of time for our state.”

Florida’s economic decline and the national recession forced lawmakers into special session to make budget cuts. The downturn left the state unable to pay for the approximately $66 billion budget lawmakers had planned.

The revised budget must now be passed by both chambers, a vote that could happen as soon as Wednesday. The two-week special session ends Friday, and lawmakers begin their 60-day regular session in March.

Rep. Ron Saunders, who leads House Democrats in budget negotiations, said Sunday he was pleased lawmakers had been able to keep money for transportation projects and would not cut affordable housing as drastically as has had been proposed.

But Saunders said he was worried about the cuts to the Lawton Chiles Endowment, which spends tobacco money on health care programs for children and the elderly. Saunders’ chamber had hoped to only tap the endowment for $400 million, not the $700 million the Senate proposed, though it left open the possibility of taking nearly all the money in the endowment.

“We were concerned before. I guess we have twice as much concern now,” said Saunders, D-Key West.

The family of Lawton Chiles, the former governor for whom the fund is named, has said it intends to fight the Legislature’s decision to take the money in court. Lawton “Bud” Chiles III, Chiles’ son, reiterated the same Sunday after budget negotiations ended.

“We see this as a battle but certainly not the last battle,” Chiles said.