More state budget cuts loom, as lawmakers face a $2.25 billion shortfall

TALLAHASSEE

Another round of deep and painful state spending cuts for schools, health care and other Florida government programs looms, as lawmakers learned Thursday that they could face a budget shortfall as high as $2.25 billion in the coming year.

“We’re not that optimistic at all,” said Senate President Mike Haridopolos, R-Merritt Island. “We’re all hopeful that the economy will turn around. But at this point we don’t see it.

“We’re going to have to find another $2 billion this year and it’s going to be painful.”

With signs that the economy might be improving over the summer, lawmakers were hopeful that the developing the 2012-13 budget would be eased by an increase in state revenue.

But the economy has faltered and state economists are scheduled to meet Tuesday and significantly reduce their revenue projections for the coming year by as much as $2 billion, according to a briefing given to the House Appropriations Committee.

Staff director JoAnne Leznoff told the committee members that the earlier budget projections represented a “sunny day.”

“Sadly, we don’t think it will last very long,” she told the committee.

If the revenue estimate declines by $2 billion, it could leave lawmakers facing a budget shortfall as high as $2.25 billion. If revenues are cut by $1 billion, it would leave a $1.15 billion gap.

That could force lawmakers to consider budget cuts of up to nearly 10 percent, although a more likely scenario would require lawmakers to cut general revenue spending by a range of about 2.5 to 5 percent.

Some of the spending cuts could be offset by shifting funds from special accounts known as trust funds. In the current budget year, lawmakers shifted more than $500 million from the trust funds, including moving $150 million from a road-building fund into the public schools.

A new round of cuts would follow several years of deep state budget.

In creating the current $69 billion budget, lawmakers had to resolve a $4 billion shortfall that led to a spending plan that cut funding for schools, universities, hospitals, nursing homes, prisons and most state programs. It included a tuition hike for college students and a mandate that public employees begin paying 3 percent of their salaries for their pension costs.

In preparation for the legislative session that begins in January, Gov. Rick Scott and lawmakers had already directed state agencies to prepare budget plans reflecting a 10 percent cut in spending. The 10 percent cuts were described as a financial “exercise,” although some of those cuts could now become a reality with the grim revenue projections.

And lawmakers heard this week how some of the cuts could impact state services, ranging from critical health care programs to the state’s prosecutors.

Lawmakers will have to find nearly $1 billion to fund growing needs in Medicaid, the federal-state health care program for the poor and disabled.

Members of the Senate Health and Human Services Appropriations Subcommittee said they might have to cut spending on adult mental-health and substance-abuse treatment programs to pay for other services, such as those for the developmentally disabled.

“We’re in a situation now where we’ve got to make some hard calls,” said Sen. Don Gaetz, R-Niceville, one of the committee members.

Bill Cervone, head of the association for the state’s prosecuting attorneys, told the House Justice Appropriations Subcommittee that a 10 percent cut would represent a loss of $27.5 million for prosecutors across the state and 400 positions.

Lawmakers eliminated some 4,000 state positions in the current budget, although the prosecutors were one of the groups that was spared.

In previous cuts, Cervone said the prosecutors had eliminated support staff. But if new cuts come, he said it would result in the loss of prosecuting attorneys, making it “very difficult” to prosecute crimes at the current level.

Public schools, state colleges and universities could also face major cuts.

In the current budget, lawmakers cut public school funding by 8 percent, although lawmakers said the actual cut was 1.5 percent after taking into account pension savings and federal funding.

Sen. David Simmons, R-Maitland, chairman of the Senate subcommittee on K-12 spending, said it would be his goal to maintain public school funding at its current level. But facing a shortfall of $1.2 billion or more, Simmons said “there are tremendous challenges in doing that.”

He suggested lawmakers have to find more ways to curb Medicaid spending and not let it “end up sacrificing other parts of our budget,” such as school funding.

As for budget cuts, Haridopolos said “everything is on the table.”

He said that is one of the reasons lawmakers undertook an aggressive plan to privatize a major portion of the state prison system, a move blocked recently by a court decision.

“My priorities are to spend less on prisons and more on education and health care,” Haridopolos said.

Democrats, who are a minority in the House and Senate, said lawmakers could offset some of the budget cuts by looking at ways to increase state revenue. They have suggested a variety of methods, ranging from closing sales tax loopholes to revamping the corporate income tax to taxing Internet sales.

But that suggestion has run into strong opposition from Republican leaders, with Haridopolos repeating his pledge that the Senate would not back any tax or fee increases, although he did not rule a tuition hike for state colleges and universities.

Sen. Nan Rich, D-Weston, leader of the Senate Democrats, said refusing to consider revenue increases is hurting critical state programs.

“The only avenue that they see to balance a budget is cuts,” Rich said. “We have been doing this for several years now and we have decimated portions of our health care system and our education system. We need to look at other alternatives.”

— Information from the News Service of Florida was used in this report.