An alternative to harsh cuts in Florida

Florida is in a decent fiscal position to dip into its funds; unlike many other states, it doesn’t face a significant liability from debt or unfunded pension costs.

In the run-up to next year’s potentially painful budget-writing session, Florida House Speaker Richard Corcoran has made it clear he’s going to push hard to focus spending on hurricane-recovery and storm-hardening efforts, while taking a dim view of projects he deems frivolous.

“There is not one single (pork) project that is worth the health and safety of Floridians,” Corcoran said at a news conference last week. It’s not that simple. Even before Irma struck, Florida faced a few lean years. The budget surplus for 2018-19 was forecast at a skinny $52 million (a pittance for a state that spends $82 billion annually). In 2020 and 2021, that surplus is projected to disappear entirely before beginning a rebound.

But it’s instructive to look at other lean budget times and focus on what Florida lawmakers really cut. Disproportionately, belt-tightening targeted areas that could least withstand it — per-student funding in public schools, or substance abuse and mental health programs. Cutting spending in mental health and addiction services carries a heavy toll, including a swelling prison budget. Meanwhile, cuts in Florida’s education spending could threaten this state’s future economic viability. Increasingly, companies are elevating the availability of an educated, trainable workforce over any other consideration when considering whether to move or expand their business.

And among those derided “member projects” that Corcoran plans to target are proposals designed to push Florida forward in the fight to draw better jobs to areas that desperately need them. Even if the Legislature did erase the $630 million in member projects and held off on increases in education spending, it might not be enough, since Florida’s income from sales taxes and other sources will probably take a hit from Irma.

Lawmakers have an alternative. For decades, Florida has been setting aside money in a constitutionally mandated budget stabilization fund. That fund, along with other state reserves, has now grown to more than $3.5 billion. State law places tight restrictions on the use of the money (including circumstances under which funds can be withdrawn — like, for example, a major natural disaster). And it sets a schedule by which money taken from reserves must be repaid.

Florida is in a decent fiscal position to dip into its funds; unlike many other states, it doesn’t face a significant liability from debt or unfunded pension costs (in fact, a Pew Trust report shows that Florida ranks ninth-lowest in long-term spending commitments, a remarkable achievement for the nation’s third-largest state).

Using reserves wouldn’t provide a license for free spending, but it could bridge critical budget gaps — such as Clearwater Republican Sen. Jack Latvala’s proposal to take a modest $20 million from reserves to keep the state from losing desperately needed opioid-addiction treatment capacity.

Florida leaders have been setting aside rainy-day funds for a reason: To get the state through unexpectedly tough times without too much trauma. Now, thanks to Irma and Matthew, it’s raining.