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Nonrecurring money keeps coming in

By MARTIN DYCKMAN
Published February 8, 2004

TALLAHASSEE - The Legislature's budget battles this year won't make much sense to the public. Money will be plentiful enough, compared to last year, to rule out another Senate freeze on "member projects," the favored synonym for "turkeys" or "pork." So you'll probably see some water and sewer projects, playgrounds and other local imperatives creeping back into the budget even as schools and health agencies continue to get less than they say they need.

There's an explanation, but it's so arcane that none of the budgeteers relishes trying to explain it to the public.

"Our cup runneth over with money," said one, "but it's all nonrecurring."

There it goes again: nonrecurring. That's the term Gov. Jeb Bush dismissed last year as "gobbledygook" before realizing that he needed it to explain why he was hoarding a windfall of nearly $1-billion in economic recovery money from Congress. In proposing to spend a chunk of it on setting up the Scripps Institute, he explained it as a textbook example of the proper application of "nonrecurring" money - to use money you don't expect to get again for something you don't plan on doing again.

But Florida is still spending a lot of that kind of money on things it plans to continue doing, such as schools and health care. This is like budgeting your annual bonus for the rent. If there's no bonus next year, you're in trouble. There's an estimated $1.6-billion of that kind of spending in Bush's proposed budget, about the same as in this year's. Some legislators are growing comfortable with the gamble because, as Senate President Jim King put it, "so long as there's always nonrecurring dollars recurring, what difference does it make?"

Answering his own question, King observed that "some year when you need $780-million and you only have $112-million, someone's going to get caught in the wringer."

The person who most fears getting caught in that wringer is Sen. Tom Lee, R-Brandon, who will succeed King as Senate president in November unless the Democrats can gain seven seats in the election, which even they don't expect. His great fear is inheriting an empty treasury and mounting expenses amid a political climate - Bush still being governor - that would prohibit raising taxes.

"We're not going to have additional taxes in this state," he said in a recent interview, "until a governor recognizes that there is a need that's not being able to be met, and I see no indication of that at this point."

With Lee (and many other senators) feeling as he does, Bush's proposal to cut the rate on the intangibles tax - which no longer applies to anybody but millionaires or near-millionares - is dead on arrival. But that would still leave Lee with nightmares of as much as $4-billion in deficits to deal with next year, comprising not only increased demands and inflation in education and Medicaid but also too much misuse of nonrecurring money in this year's session.

The phenomenon King mentioned, that the windfalls somehow keep coming, is unusual. Historically, the Legislature could safely count on about $400-million each year, largely as a result of imprecise revenue estimates. That the estimates are inevitably less accurate when the economy is going in or out of recession helps to explain the unusual bulge in windfalls. Home refinancings are another factor; when they subside, so will the taxes Florida collects, and there will be no more surpluses to skim from earmarked trust funds.

People looking for another fight between King and House Speaker Johnnie Byrd may be disappointed, but there are signs of one brewing between King and his successor over budget policy. Ironically, it was King himself, two years ago, who went public with similar worries over the deficit he might inherit.

"We're supposed to be fiscally conservative," he acknowledged in a recent interview. "No one can argue that the way we've spent money in the last few years meets that test. Any businessman or financier or accountant or bookkeeper would tell you that what we have been doing with nonrecurring dollars spent on recurring projects is highly risky and we've been fortunate that our hand hasn't been called."

Lee, he said, "is concerned that the time the hand gets called is when he's got the gavel in his hand, and I don't blame him."

Tax increases are out. Anybody expecting some this year is "dreaming in Technicolor," says Lee. But in an election year, no one wants to appear indifferent to such needs as schools and health care. Especially not when it could be turned against the Bush who will be on the ballot this year. It will be hard to resist going wild with the nonrecurring funds.

"This is all setting up a huge showdown of wills," says Lee, "and it's going to be a choice between doing what's politically expedient and doing what's right. I don't have a lot of confidence in this Legislature when they're faced with those two choices."

[Last modified February 8, 2004, 01:45:41]


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