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Crist builds budget on gambling funds

The governor also would dig into reserves and the Chiles fund.

By STEVE BOUSQUET, Tallahassee Bureau Chief
Published February 1, 2008

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Gov. Charlie Crist adjusts charts that show the highlights of his budget recommendations for the upcoming fiscal year at a news conference Thursday in Tallahassee.
	[AP photo]

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TALLAHASSEE - Gov. Charlie Crist is betting on a dramatic increase in gambling proceeds to help finance state services next year, but that's not the only roll of the dice in his $70-billion budget proposal.

Faced with shrinking state revenue and no desire to raise taxes, Crist unveiled a plan Thursday that also includes a series of controversial accounting moves to brunt the impact on state services while also finding money for a handful of new initiatives.

Among Crist's chief ambitions: Increasing public schools' per-student funding 5.5 percent, expanding energy research and launching a plan to provide health care for uninsured Floridians in Hillsborough and 13 other counties.

"Our proposed budget reflects the priorities and needs of our fellow Floridians - to build a bridge to Florida's future and better economic times ahead by maintaining what we have gained in the past five years," the Republican said.

But critics, from Chief Financial Officer Alex Sink to House budget chairman Ray Sansom, quickly emerged Thursday. And it looked unlikely that the Legislature would embrace Crist's fiscal strategy when it writes the budget during the regular 60-day session that begins March 4.

The state is facing a $2-billion shortfall in money to fund next year's budget due to the downturn in the state's economy, including in the housing market.

"I've never been in favor of building the future of Florida on the back of gambling," Sansom, R-Destin, said of Crist's reliance on $405-million in new gambling money. "You should build the economy the old-fashioned way - bringing in jobs and keeping jobs."

Just as controversial was Crist's plan to redirect more than $1.1-billion in reserves from 40 separate programs with dedicated funding sources. Crist would transfer money earmarked for everything from affordable housing to the state's workers' compensation insurance program.

"While I understand the current challenge to find resources in this year's budget ... a sweep of this magnitude will require the state to raise workers' compensation assessments - taxes - on Florida businesses as early as January 2009," warned Sink, a Democrat, of the $129.5-million Crist proposes transferring from the insurance program.

Crist also would tap one-sixth of the principal of the $2.4-billion Lawton Chiles Endowment, the money lawmakers set aside years ago from the tobacco company settlement to be an ongoing revenue source for health programs. For years, the Legislature has spent only interest from the fund - named for the governor who pursued the tobacco settlement.

Crist said that he spoke with Rhea Chiles, widow of the late Democratic governor, and that she agreed with his plan. Some of that money would be dedicated to a new $64-million initiative in 14 counties with the highest rates of uninsured residents, including Hillsborough, Miami-Dade, Broward and Palm Beach. An outreach program would steer citizens and noncitizens alike from hospital emergency rooms to primary health clinics.

One in five Florida residents has no health coverage.

Other critics consider such sweeps a fiscally reckless way to pay for ongoing programs because those trust fund reserves can be spent only once.

The practice has been compared to paying the mortgage with a Christmas bonus, meaning the state will have to find a new source of money to plug the hole that will appear a year from now.

"It's a one-year fix," said Sen. Mike Fasano, R-New Port Richey. "If the economy gets better, then it was the right move, but there's no guarantee of that."

Crist's plan also would trigger a recent state law requiring a super-majority vote of both chambers of the Legislature if the budget uses one-time money for more than 3 percent of recurring expenses.

Crist's budget would require 3.23 percent.

Asked if he was diverting one-time sources of money just to avoid tough spending cuts, Crist said, "I don't think so. I don't believe that. I believe that our economy is going to continue to get better." He pointed to Tuesday's passage of the property tax cut that he is counting on to revive the housing market.

Most of the additional gambling money would come from an expansion of the state-sponsored Florida Lottery, including more advertising to lure more bettors, instant-ticket vending machines and more terminals in high-traffic areas. Crist also proposes adding a second daily drawing in the Cash 3 and Play 4 games.

Another $130-million would flow into government coffers as the state's share of the new casino gambling on the Seminole reservation, which the Legislature is seeking to revoke in court. And Crist is counting on $27-million more as the state's share of new slots in Miami-Dade, which voters approved Tuesday and won't be operating for months.

Crist's budget would add about 1,300 more people to the state work force, most of them in state prisons, which have begun construction of 8,000 beds to house a rapidly-growing inmate population.

Times staff writer Alex Leary contributed to this report. Steve Bousquet can be reached at bousquet@sptimes.com or 850 224-7263.

Where money would come from

Gov. Charlie Crist's proposed budget is depending on new and redirected money to make up a $2-billion shortfall plus cover some program enhancements, such as 5.5 percent more for public schools in 2008-2009. Other cuts in service would bring in $230-million. Some highlights of where the money would come from:

Gambling proceeds: $405-million

Crist wants to expand some lottery games to twice-daily drawings, and he's banking on revenue from the Seminole Indians and yet-to-be-installed slot machines at Miami-Dade parimutuels.

Lawton Chiles Endowment: $400-million
Crist wants to spend one-sixth of the $2.4-billion fund. Previously, the state has used only interest from the tobacco settlement money, not principal.

Other trust funds: $700-million
Money normally set aside for affordable housing, recreation land buys, workers' compensation and other programs would be diverted.

Cut private college aid: $50-million
The state would end, for most incoming freshmen, financial assistance to attend a private Florida college.

Truck fines: $34-million

Increased fines for overweight cargo/shipping trucks.

 

[Last modified February 1, 2008, 06:47:02]