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    Even Republicans find budget troubling

    The budget relies on one-time money sources, raising concerns about large shortfalls next year.

    By ALISA ULFERTS, Times Staff Writer
    © St. Petersburg Times
    published May 20, 2002


    TALLAHASSEE -- Republicans have long thought of themselves as the party of fiscal responsibility.

    But the budget Florida's Republican-controlled Legislature has sent to Gov. Jeb Bush is glued together in a way that has some Republican leaders worrying about huge shortfalls next year unless the economy improves dramatically.

    "Robbing Peter to pay Paul is not a good way to govern in the long term," said Sen. Tom Lee, R-Brandon.

    Yet that's exactly what the Legislature did, prompting Sen. Jim King, the moderate Jacksonville Republican expected to lead the Senate next year, to suggest lawmakers are paying off one credit card with another. To balance the budget, lawmakers relied on money that won't be there next year:

    More than $200-million was shifted from various environmental protection funds, including a popular land-buying program, to pay for unrelated services like eyeglasses for the poor and legal help for foster kids.

    $765-million was rolled over from last year to help pay for things such as education and health care. With more students and Medicaid patients expected next year, that money will be needed again but there's no guarantee state agencies won't spend every dime they get this year.

    $153-million came from the state's intangibles tax on stocks and bonds, which is scheduled to continue phasing out July 1, 2003. Yet lawmakers are relying on it this year to help pay for things including government salaries that will be needed even after the tax phases out.

    Lawmakers funded a health care program for people with catastrophic illnesses for just 10 months. If they don't find money during next year's legislative session to fund the last two months, those people will have to pay for much of their costs on their own.

    Florida TaxWatch, a conservative budget watchdog based in Tallahassee, says the Legislature's budgeting is akin to using lottery winnings for a down payment on a house without knowing where the money for monthly payments would come from.

    It has King worrying aloud that he could be remembered as the Senate president who had to raise taxes. Still, Lee and other Republicans who are uneasy about the budget say they are being fiscally responsible.

    "I think it's a credible argument that this kind of creative budgeting is actually a fiscally conservative thing to do because the alternative is to go out and raise revenue," Lee said.

    The irony is not lost on Democrats, who were long accused by Republicans of being fiscally undisciplined. Democrats now accuse the GOP of creating a sham budget that will get them through the November elections only to create a bigger mess down the road.

    "Is there hypocrisy? Of course there's hypocrisy. They are leading us clearly into a deficit situation," said House Minority Leader Lois Frankel.

    Rep. Ron Greenstein, a Coconut Creek Democrat who tracks state spending for the party, thinks the problems will become evident soon after the elections. "I predict we'll be back in November to deal with the budget," Greenstein said.

    The Legislature cut about $1-billion from the budget in December, only to restore much of the cuts this spring. That allowed Republicans to claim eye-popping spending increases on education and social services while putting the budget at risk, Frankel said.

    "I think they deliberately calculated to take the cuts in December so Bush could get on television and claim $1-billion more dollars for education," Frankel said.

    Adding insult to injury, Democrats say, is a $262-million tax break Republicans gave corporations this year.

    Republicans, however, deny playing politics with budget cuts. They say they increased education spending even when compared to the budget before it was cut. And they are convinced the economy is improving so tax revenue should rise with increased consumer spending.

    But TaxWatch has warned lawmakers that they have built a ticking time bomb into the budget. Depending on one-time sources of money to pay for things that are needed every year is "bad budget policy," the nonpartisan group said.

    "At some point in time the moment of truth will come," said Keith Baker, who runs the research department at Florida TaxWatch.

    Ten years from now, lawmakers must find $100-million to replace the money they took from a land conservation fund. Lawmakers plugged the hole with a bond, which Lee said must be repaid in 10 years. "That does obligate a Legislature a decade from now to find $100-million," Lee said.

    But big problems could crop up far sooner than that.

    Democrats estimate that next year's potential shortfall could be as much as $3-billion because of growth in the student and Medicaid populations and other programs such as rising courts costs and the voter-imposed constitutional requirement to build high-speed rail.

    But that doesn't faze House Speaker Tom Feeney, who said the worst thing that could happen to Florida is still better than what is happening in other large states that have bigger budget holes, such as California's $20-billion shortfall.

    "I would not trade Florida's budget with any of the top 10 states," Feeney said.

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