October 21, 2021
Cash Crunch: Lawmakers' challenge will be to balance the budget

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2021 Legislative Preview

Cash Crunch: Lawmakers' challenge will be to balance the budget

COVID-related concerns will dominate the 2021 legislative session.

Amy Keller | 3/1/2021

Florida lawmakers return to Tallahassee this month for a 60-day session that will focus in large part on the economic fallout from the prolonged COVID-19 pandemic. Their biggest chore is filling a $2.75-billion budget gap driven largely by declines in sales tax dollars related to tourism and recreation.

“The budget picture will be bleak, and funding will have to be more carefully prioritized around helping people recover and doing things that are most likely to re-stimulate the economy,” says Dean Cannon, a former Speaker of the Florida House of Representatives and president and CEO of GrayRobinson, one of the state’s largest law firms.

GOP leaders have warned of looming spending cuts, including to health care and public education, which make up more than two-thirds of the budget. “It is mathematically impossible to cut $2 billion out of this budget without taking anything from education,” Rep. Jay Trumbull, chairman of the House Appropriations Committee, warned colleagues at a January hearing.

Gov. Ron DeSantis, meanwhile, has proposed a $96-billion budget — $4 billion over the previous year — that’s considerably more optimistic. The governor says his spending plan “builds on key investments” in areas like education, public safety and the environment. DeSantis cites higher-than-expected revenue and the strength of the state’s economy as the basis for his budgetary proposals.

Most legislators view DeSantis’ expectations as unrealistic, however. If cuts become inevitable, lawmakers may try to find other ways to help plug the hole this year and gird for a projected $1.9-billion shortfall in FY 2022-23. Lawmakers are likely to sweep some of the state’s trust funds. They could also tap into the Budget Stabilization Fund, or so-called rainy day fund, which has a balance of $1.6 biilion, though lawmakers may be reluctant to draw down reserves much.

Other potential sources of revenue include a stimulus package from Washington and the potential signing of a new gaming compact with the Seminole Tribe, though neither is a given. Although there’s little appetite for tax increases in the Republican-led chambers, lawmakers could of creating a tax amnesty period, which would allow Florida taxpayers also look for ways to boost revenue. A measure to collect taxes from online sales appears to have gathered steam, and some have raised the idea with overdue bills to pay what they owe the state with penalties waived.

As lawmakers grapple with the budget, COVID-related concerns will dominate much of the policy agenda as well.

Florida businesses are pushing hard for a liability shield from COVID-19 lawsuits, setting the stage for an intense tort reform fight with the Florida Justice Association, the state’s trial lawyers’ organization. House Speaker Chris Sprowls (R-Palm Harbor) has vowed to fast track the legislation, which has the backing of dozens of heavyweight business groups, including the Florida Chamber of Commerce, Associated Industries of Florida, the Florida Retail Federation and the Florida Restaurant and Lodging Association. Senate President Wilton Simpson and Gov. Ron DeSantis have also expressed support for the idea.

Identical bills — sponsored by House Rep. Lawrence McClure (R-Dover) and Sen. Jeff Brandes (R-St. Petersburg) — would provide general liability protection to Florida businesses, schools, churches and other non-profits that have made a good faith effort to follow public health guidelines and take safeguards to protect employees and customers. The measures would provide retroactive protection dating back to the start of the epidemic, include a oneyear statute of limitation on lawsuits and plaintiffs would have to prove the defendant acted with gross negligence. Lawmakers are looking at filing a separate bill that would provide legal protections for hospitals, health care providers and nursing homes.

The Legislature also created two panels to conduct post-mortems of the state’s COVID response and better prepare for future emergencies.

Sen. Danny Burgess (R-Zephyrhills), chair of the Select Committee on Pandemic Response and Preparedness, said at a January hearing that the panel will “look at every aspect of the state’s response and leave no stone unturned” so that Florida would “never again have to consider closing our economy or closing our schools.”

Other panel members homed in on a broad range of topics — from expanding broadband access to underserved areas to telehealth, emergency powers used by state and local government during the pandemic and vaccine distribution. Brandes says he wants the committee to take a “deep dive into the breakdowns” of Florida’s unemployment system and the pandemic’s impacts on the criminal justice system — including a backlog of court cases, “the fact that we really have not reopened jury trials” and the COVID-related deaths of more than 200 inmates and at least six corrections officers.

COVID aside, GOP leaders plan to take a closer look at everything from flood mitigation to reforming the state’s child welfare system to a crackdown on disorderly protests. Other tasks on their plate include redistricting and implementing a minimum wage increase approved by voters last fall. Here’s a look at those and other hot button issues on the agenda.

Budget Pain Perspective

Lawmakers face tough choices this year, but Florida’s in better shape than some other states and even some cities. Illinois is looking at a deficit in the range of $4 billion, and lawmakers there have suggested possibly borrowing from the Federal Reserve to plug the hole. New York state, meanwhile, anticipates an historic, $15-billion deficit, and New York City faces a $3.8-billion shortfall — that’s for a city with 8.4 million people (40% of the entire state of Florida) and an annual budget of approximately $88 billion (96% of Florida’s current budget).

New York Gov. Andrew Cuomo has talked about raising income taxes on high earners, in addition to cutting school and Medicaid funding, among other things. Dean Cannon, president and CEO of GrayRobinson and a former House Speaker, says Florida is in better shape because it’s been fiscally conservative. “Certainly we are suffering along with the other states, but we should be in a better position to recover more quickly because we’re not subject to some of the loose fiscal policy that has put those states really in a tough spot,” he says.

 

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