By John Kennedy
The News Service of Florida
House Speaker Larry Cretul released budget allocations Thursday, pumping the largest share of taxpayer dollars into public schools this election year, pulling $600 million out of trust funds, and avoiding new taxes or fees.
The allocations enable the House to begin work in earnest on a 2010-11 state budget, the chamber’s budget-writers say they want to complete by April 1. That allows the remaining weeks of the legislative session to be devoted to negotiations with the Senate on a final spending plan.
Public schools are earmarked to receive $9 billion in general revenue, a 9 percent increase in state funding but a boost largely offset by a sharp loss in local dollars normally generated by property taxes. Plummeting property values have forced Cretul to steer more state cash to schools to avoid having the Legislature tagged with increasing the school property tax rate just weeks before the November general election.
“This increase will not be sufficient to avoid significant reductions in education services or programs,” Cretul acknowledged in a four-page memo to lawmakers Thursday morning.
Cretul included a similar warning on health and human services funding. The $6.7 billion in general revenue for HHS is supplemented with another $5 billion from state trust funds (mostly federal matching cash) but also doesn’t come close to helping offset what is shaping up as a $1.1 billion to $3.2 billion shortfall in the state’s overall budget.
State dollars going to health and social programs are up 19 percent over last year in Cretul’s allocations – but an anticipated reduction of more than $1 billion in federal stimulus money and the sharp spike in Medicaid enrollment diminishes the effect of the extra state money.
Cretul also said he plans to hold aside roughly $1 billion as a “rainy day” reserve, to cover spending needs if the economy continues to slump. He also said lawmakers must ready themselves this year for a $5 billion budget shortfall in 2011-12, when the federal stimulus used to bolster state spending will “flameout” altogether.
“Consequently, significant reductions to recurring state spending will be needed to achieve and maintain a balanced budget,” Cretul wrote. “This will be more difficult than in previous years because the low hanging budgetary fruit has already been picked.”
Cretul also noted the bad news going forward, with next year’s budget expected to be even tougher to balance.
“The long range financial outlook adopted by the Legislative Budget Commission anticipates a shortfall exceeding $5 billion for FY 2011-12 due primarily to the full effect of the flame out of federal stimulus funding,” Cretul said in the memo.
