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Budget Stabilization Fund To Help Cover State Revenue Gap

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By CATHERINE WHITTENBURG | The Tampa Tribune

Published: August 29, 2008

TALLAHASSEE - Gov. Charlie Crist released his plan this morning to narrow the $1.5 billion gap in this year's budget.

Economists predicted this month that rising unemployment, reduced consumer spending and a flagging housing market would leave Florida $1.8 billion short of the tax revenues lawmakers had expected when they approved the 2008-09 spending plan. Factoring in a $300 million cushion left unspent, the state is facing a nearly $1.5 billion hole in the budget.

Crist had indicated last week that he wanted to use a little more than $600 million from the state Budget Stabilization Fund to cover part of the shortfall while waiting to see whether forthcoming revenue estimates were as dire as forecast. Today, he released his official proposal to transfer $672 million from the stabilization fund to cover the shortfall in general revenue.

Anticipating the possibility that revenues could come in low, the Legislature expanded Crist's authority to tap into the state's rainy-day fund. Crist will have to submit the plan for approval to the joint Legislative Budget Commission, which next meets on Sept.10.

Still unknown is whether Crist will also seek to turn a 4 percent spending holdback he ordered for state agencies into a permanent cut. The governor said recently he is inclined to do that, though some lawmakers have said the Legislature needs to decide such cuts on a program-by-program basis.

On Wednesday, state economist Amy Baker warned the Legislative Budget Commission that even if it and the governor fill the budget hole, the state will still face a $3.5billon gap in next year's budget. Lawmakers from both parties expressed concerns this week about cuts that may affect education, health care and criminal justice programs, the biggest areas of state spending.

Reporter Catherine Dolinski can be reached at (850) 222-8382 or cdolinski@tampatrib.com.

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