Florida state budget (2008-2009)

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State Information


Florida was one of five states that had been hit the hardest by the mortgage crisis and foreclosures, along with California, Arizona, Nevada and Illinois.[1] On January 14, 2009, the Florida legislature passed a deficit-elimination package aimed at closing the $2.8 billion gap facing the Florida state budget.[2] Florida was slated to receive $12 billion from the federal government as part of the American Recovery and Reinvestment Act signed by President Obama on February 17, 2009.[3] These funds would be given over the next three years and were expected to ease the state's budget crisis and eliminate the need to reduce government services and jobs.[3]

Budget process

See also: Florida state budget

Florida's fiscal year runs from July 1 to June 30 of the following year.[4] Each July, the governor's office and the state legislature issue directions to state agencies to begin developing budget requests for the upcoming year.[4] The agencies submit their budget proposals to the governor by mid-October.[4] The governor's office reviews the requests in light of the available funds and economic conditions and submits the budget to the legislature for review.[4] The state's House and Senate pass appropriation bills that are ultimately incorporated into a General Appropriations bill that is presented to the governor for final review and signature.[4]

The state's governor can use a line-item veto to cancel specific appropriations without having to reject the bill in its entirety.[4] The governor's veto can be overridden only by a two-thirds vote of the members of each house.[4]

Budget status, 2008-2009

As early as November 2006, Florida had the second most foreclosures in the country, with 95,862 homes foreclosed upon in just the third quarter of that year.[5] In November 2007, Florida's government began withdrawing money from a multi-billion dollar investment pool that funded local cities and school districts over concerns of investments linked to subprime mortgages.[6] In 2007, Florida also began cutting spending in an effort to balance the budget.[7] A year later, in December 2008, Florida only trailed Arizona in the number of foreclosures, and it implemented a voluntary, 45-day moratorium on home foreclosures.[8] Although this led to a 20% decline in foreclosures for January 2009, the Florida foreclosure rate remained 1 in 214 homes.[8] The collapse of the housing sector was a major concern, particularly since it was predicted to continue on its downward spiral until 2010-2011.[9]

In addition to the far-reaching effects of the mortgage crisis, Florida faced long-term budget problems as a result of a decline in its major economic engines -- building, migration and tourism, which had all declined.[3] State revenue had declined for three years in a row, and the new fiscal year beginning July 1, 2009 appeared poised to be the fourth.[7] With the fall in property taxes, school districts remained underfunded.[7] Also, since Florida does not had an income tax, it relied heavily on sales tax, corporate tax and real estate transaction taxes, which had all declined.[7]

The following table provides a glimpse into state expenditures and gross domestic product from 2000 to 2009.

Fiscal year General funds expenditures Gross domestic product (millions)
2001 $91,800[10] $497,423[11]
2002 $99,300[10] $522,719[11]
2003 $107,400[10] $559,021[11]
2004 $115,500[10] $607,284[11]
2005 $130,900[10] $670,237[11]
2006 $140,500[10] $716,505[11]
2007 $150,900[10] $734,519[11]
2008 $162,200[10] $753,000[10]

2008 deficit-elimination package

On January 14, 2009, the Florida legislature passed a deficit-elimination package, in an effort to close the budget shortfall for 2008.[12] The plan included:

  • increases in traffic fines of $10 for every traffic ticket issued except for speeding tickets, which went up by $25, and an elimination of an 18% discount on tickets for those enrolled in driver's improvement courses;[12]
  • a suspension in the environmental land program saving $4 million and canceling $250 million in bond sales;[12]
  • a 10.5% cut in Medicaid payments to nursing homes and a tax increase on nursing homes;[12]
  • a transfer of $400 million from a Rainy Day Fund, leaving about $250 million in the fund;[12]
  • a $466 million cut in education spending, an option for school administrators to volunteer for pay cuts and limiting the severance of teachers and administrators to one year;[12]
  • a 2% decrease in teacher's bonuses, saving the state $11 million;[12]
  • a 4% cut in aid to state universities and community colleges for a savings of $157 million;[12]
  • $700 million to be borrowed from a $1.2 billion endowment that invests money from tobacco settlements for future use on healthcare programs;[12]
  • a $9.9 million cut in the state's public/private tourism agency, Visit Florida;[12]
  • a 5% cut in a program that helps people with developmental disabilities, including autism;[12]
  • a $190 million cut in a program that helps pay for low and moderate-income housing;[12]
  • an elimination of 1,400 state jobs; and[12]
  • a $3.75 million decrease in funding for cancer, cardiovascular, stroke and pulmonary diseases.[12]

Stimulus funds

In February 2009, Governor Crist requested $2.3 billion in funds from the federal government.[13] Governor Crist stated, "I'm not a big-government fan, but there are times when government needs to help."[13] With President Obama's signing of the stimulus bill on February 17, 2009, Florida expected to receive $12 billion in federal funds.[7] Governor Crist believed that the federal funds would be enough to avoid further spending cuts if the legislature approved an agreement allowing Seminole Indians to expand gambling at tribal casinos in exchange for paying the state millions of dollars per year for the freedom to did so.[7]

Of the $12 billion, Florida might not have been eligible for $3.5 billion because of a requirement that states that accepted stimulus money should not lower education spending below 2006 levels.[14] Florida had asked Secretary of Education Arne Duncan for a waiver so that they might receive the full $12 billion.[14][15]

On March 8, 2009, The Miami Herald reported that the state was considering borrowing against the Florida Prepaid College Board, a fund into which parents pay in order to lock in tuition rates for their children's future college tuition.[16] Some believed that because the fund was guaranteed by the state, the state should be able to borrow against the $8.8 billion fund.[16] Others disagreed, arguing that the state did not have the right to borrow against the fund and further, that this was another example of "lawmakers pillaging savings accounts and special funds."[16]

State budget website and analysis

See also: State budget websites and analysis

As of 2009, Florida had some level of transparency, including "Florida's Checkbook," an online spending database created by the state's Chief Financial Officer, Alex Sink.

Certain public agencies have failed to comply with open records laws.[17]

Economic stimulus transparency

  • The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the nation. Of that $787 billion stimulus package, it was estimated that 69%, or over $541 billion, would be administered by state governments.[18]
  • It was estimated that Florida would receive at least $7.7 billion in federal funding.[19]

Legislation

Florida Senate Bill 1796 "directs the Legislative Auditing Committee to provide oversight and management of a state website providing information on governmental appropriations and expenditures" and "requires the Executive Office of the Governor to establish a website providing information relating to each appropriation in the General Appropriations."[20] SB 1796 was signed by Governor Crist on May 27, 2009.[21]

Government tools

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database (in this case, Florida's Checkbook Online):

Criteria for evaluating spending databases
State database Searchability Grants Contracts Line item expenditures Dept./agency Budgets Public employee salary
Florida's Checkbook Y
600px-Yes check.png
N
600px-Red x.png
Y
600px-Yes check.png
N
600px-Red x.png
N
600px-Red x.png
N
600px-Red x.png

Limitations and suggestions

Florida's Checkbook should post employee salaries just as other state transparency sites (such as the Missouri Accountability Portal) do.

Support for creation of the database

The National Taxpayers Union urged representatives to support House Bill 181, which would have created a spending transparency database.[22]

Americans for Tax Reform also urged for transparency and made a statement to the Florida Finance and Tax Committee.[23][24]

Public employee salary information

See also: Florida state government salary

See also

External links

References

  1. Fox Business, News Ideas by Brian Sullivan, "Nationwide Crisis" or Speculative Fallout?, February 19, 2009
  2. Florida Today, Florida deficit-elimination plan passes, January 14, 2009
  3. 3.0 3.1 3.2 Herald Tribune, Florida's Stimulus: $12 Billion, February 17, 2009
  4. 4.0 4.1 4.2 4.3 4.4 4.5 4.6 Florida Governor Charlie Crist, The People's Budget, Budget Process Overview
  5. Foreclosurelistings.com, Florida Ranks Second Among States with Most Foreclosures, November 13, 2006
  6. New York Times, Fund Crisis in Florida Worrisome to States, December 5, 2007
  7. 7.0 7.1 7.2 7.3 7.4 7.5 MSNBC, More spending cuts likely for Florida budget, February 18, 2009
  8. 8.0 8.1 Tampa Bay's 10 Connects.com, 1 in 214 Florida Homes in Foreclosure, February 12, 2009
  9. Builder Online, South Florida's housing market recovery won't be anytime soon in Miami Dade county
  10. 10.0 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 US Government Spending, Florida State and Local Spending, 1992-2010
  11. 11.0 11.1 11.2 11.3 11.4 11.5 11.6 Iowa Workforce, Florida
  12. 12.00 12.01 12.02 12.03 12.04 12.05 12.06 12.07 12.08 12.09 12.10 12.11 12.12 12.13 MSN Money, Florida's $2.88 deficit-elimination plan at a glance, January 14, 2009
  13. 13.0 13.1 The Voyager, College Media Network, State budget cuts continue, January 29, 2009
  14. 14.0 14.1 The Ledger, Schools Would Get Help, but Not Across the Board, February 17, 2009
  15. Wakulla County Real Estate, "Senate Budget Panel Questions Whether Crist Budget Plan was Feasible," March 9, 2009
  16. 16.0 16.1 16.2 The Miami Herald, State weighs tapping into prepaid tuition fund for economic relief," March 8, 2009
  17. Sun Sentinel, "Many Florida public agencies flunk simple open records test," November 28, 2008
  18. National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
  19. Wall Street Journal, "Stimulus Spending by State"
  20. Florida Senate, "Senate 1796: Relating to Governmental Financial Information," accessed June 16, 2009
  21. Office of the Governor, "Governor Crist's Bill Actions Today," May 27, 2009
  22. National Taxpayers Union, "An Open Letter to the Florida House of Representatives: Taxpayers Support Online Spending Transparency (HB 181)," March 14, 2008
  23. Americans for Tax Reform, "Letter," March 26, 2008"
  24. Americans for Tax Reform, "Transparency in Government Spending – A Way for Florida to Lead the Nation," February 21, 2008