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Don't squander surplus

Florida's record surplus gives lawmakers a chance to invest for the future, ease the homeowners insurance crisis and pay off debt.

Florida is flush with cash. A booming real estate market has handed the Legislature another $1-billion or so as it crafts a 2006-07 state budget. So when lawmakers return to Tallahassee on Monday for the final three weeks of the legislative session, the gold rush will be on. The House and Senate already have passed their separate spending plans, and now there's more than $3-billion still sitting on the table. Supporters of every tax cut and spending scheme will be going after it.

This is an opportunity that should not be squandered, because it is not likely to come around again. The real estate market is cooling, the growth in sales tax revenue is leveling off and things won't look this rosy next year. The unspent tax money should not be blown on excessive tax cuts in an election-year gimmick, or blown on a long list of special-interest pork. This is a rare opportunity to invest wisely in the future, lessen the pain of the homeowners insurance crisis and pay off some debt.

In round numbers, here are some priorities lawmakers should consider as they eye the remaining cash and negotiate a budget:

The fine print on the House appropriations bill is that nearly half of the 6.2 percent increase in per-student funding is dedicated to reducing class sizes. That means school districts, in a time of prosperity, would be given barely enough to cover inflation. Teachers deserve raises. Pension, health care and fuel prices have soared. The least the Legislature can do is approve the Senate education spending plan, which would give school districts a total 8.7 percent increase. That would keep faith with voters who demanded smaller classes while at least providing enough for schools to keep pace with inflation. The difference between the House and Senate bills is roughly $420-million.

Voters in 2002 gave the state eight years to reduce the number of students in overcrowded school classrooms, but lawmakers have spent only $783-million in the past two years to actually build enough new schools to accomplish the task. Gov. Jeb Bush asked in his budget for $1.9-billion to begin serious construction, but the House budget offers only $1.1-billion. Using the surplus to build schools also eliminates the need for costly loans.

The sinister game that has been played with public universities in recent years has been to pretend, for budget purposes, that some of the new students each year don't really exist. When the state doesn't pay for enrollment growth, quality is the casualty. Campuses faced with serving more students with no extra money end up doing things like holding classes in movie theaters, which the University of South Florida has done. Both the House and Senate spending plans cheat university enrollment growth again this year, to the tune of $40-million. Don't lawmakers aspire to greatness in the field of higher education?

Legislators would cut up to $200-million from KidCare, the subsidized health insurance program for children, even though the state covers only half of those whose families cannot afford private insurance. Committing $60-million in state funds to KidCare would restore those funds by triggering nearly $145-million in federal matching dollars. That would allow the 214,816 current enrollees to continue receiving care and the state to make headway toward covering another 300,000 other poor, uninsured children. Legislators should guarantee coverage for children of legal immigrants and provide at least $9-million for advertising and community outreach so KidCare can enroll children eligible for the program. Massachusetts has embarked on a revolutionary effort to see that all of its residents have health care coverage. The least Florida can do is cover as many poor kids as possible who are here legally.

Since the state created the Department of Juvenile Justice in 1994, it has largely gotten out of the business of directly providing such services as assessment centers, residential treatment and after-care programs for troubled juveniles. But after handing that difficult work over to private providers, the state still should fulfill its obligation to properly pay for the services.

That hasn't happened. Reimbursement rates have remained essentially flat for more than a decade, and that isn't good for the children these programs are trying to help. Some providers are giving up and canceling contracts, employee turnover is high because of low salaries and some direct services for kids are being cut. Juvenile justice advocates estimate there is a $100-million gap between reimbursement rates and the rise in consumer prices since the state started dramatically outsourcing programs.

Program providers aren't asking to erase that gap. They just want enough money to raise reimbursement rates generally by 10 percent. That is more than reasonable. Invest in juvenile justice programs to help ensure they help youths in trouble, or be prepared to build more expensive prison beds down the road.

A significant portion of this year's revenue windfall is the result of hurricane recovery efforts. It is reasonable to use some of it to soften the impact of steep assessments on all homeowners policies by Citizens Property Insurance, the state-run insurer of last resort. Policyholders already are paying $516-million in assessments this year to cover Citizens' deficits from 2004, and even larger assessments next year would be needed to cover a $1.7-billion deficit from 2005.

That's too much for homeowners to be expected to reasonably handle. The string of hurricanes were unprecedented, but the state also bears some responsibility for the insurance crisis. Gov. Jeb Bush is right to insist that any money used to reduce assessments must be accompanied by real reform, and that effort is a work in progress. While $500-million probably is the minimum to make a real difference in assessments, it would be unreasonable to wipe out the entire $1.7-billion Citizens deficit. There are other needs, and it would unfair to Floridians who aren't homeowners.

In times of plenty, it's as smart for government to pay off some debt as it is for individuals. Florida TaxWatch calculates that reducing tax-supported long-term debt by $1.75-billion, or 10 percent, would save taxpayers $165-million a year. That sounds good, but paying off that much debt wouldn't leave enough cash to make the investments needed in education and other areas now.

Florida is in good financial shape, and the governor has built up record reserves. Even so, we agree on the bottom line: Before spending every nickel this year, lawmakers should save a decent amount to pay off some outstanding debt.