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State Budget Cuts Loom; Tax Increases Next?

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By CATHERINE DOLINSKI | The Tampa Tribune

Published: January 5, 2009

TALLAHASSEE - Higher taxes and other new sources of revenue loom on Florida's horizon -- but not in time to stave off $1 billion in budget cuts now.

That was the message from Senate President Jeff Atwater and other leading lawmakers, who spoke today about tackling ways to fatten the state's dwindling coffers when the Legislature convenes this spring.

December's tax revenues fell $100 million below projections that state analysts made only a month earlier, said Atwater, R-North Palm Beach. He described this week's budget-cutting special session to his chamber as merely "a prelude" to tougher decisions as state revenues continue plummeting.

Expect proposals by March for hiking the cigarette tax and eliminating tax exemptions, he said. "Our agenda of critical work will include a meaningful review of the tax structure."

Even Dean Cannon, Speaker-designate of the more fiscally conservative House, said lawmakers will have to consider new revenue options next session.

But for now, both chambers are concentrating on cuts. Faced with a $2.3-billion budget hole, leaders in both chambers intend to carve $1 billion out of the current fiscal year's $66-billion state budget that they have already cut by $6 billion since spring 2007.

As early as this afternoon, it was clear the chambers had agreed on the lion's share of reductions. They will likely include a reduction of about $26.7 million to the K-12 school operations budget for Hillsborough County, on top of more than $9.8 million the county is losing because of an enrollment drop. All told, the state's public schools will lose about 2 percent in funding per student.

Most spending areas, including universities and community colleges, face cuts of roughly 4 percent, reflecting the 4-percent spending "holdback" Gov. Charlie Crist ordered last summer. Heavier cuts include a 10 percent, or $220 million, cut in Medicaid reimbursement for nursing homes.

Rep. Ron Saunders, D-Key West, vented frustration with Republicans for refusing to approve a gambling compact with the Seminoles in time to impact the budget cuts.

The latest pact, which the state Supreme Court voided last spring, was worth at least $100 million per year to the state. Crist had proposed plugging part of the budget hole with $135 million derived from expanded Seminoles gambling operations.

"Why isn't it at least on the table?" said Saunders, a former budget chairman.

Both chambers have signaled interest in forging a new deal with the Seminoles – in the House, by creating a committee to consider the issue. But that panel began meeting only last month, at which point co-chairman Bill Galvano, R-Bradenton, said January was too early to take up the compact.

Among the few revenue-raisers that will likely pass this month: boosting select court fees and fines. Victor Crist, chairman of the Senate's justice budget panel, outlined a plan that includes $5-hikes in traffic tickets and requiring court fees from defendants in cases where the court withholds adjudication of guilt. Divorce filing fees will not go up, he said.

"We didn't invent these; the recommendations came from the judges themselves," said Crist, R-Tampa, who plans to channel the additional revenue into new trust funds dedicated to supporting the judicial system.

Reporter Catherine Dolinski can be reached at (850) 222-8382.

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