By Jim Turner and Jim Saunders | News Service of Florida
TALLAHASSEE --- Florida lawmakers Thursday started moving forward with a proposed constitutional amendment that supporters say would bulk up financial reserves to help the state weather potential problems such as economic recessions.
“After this bill passes, we will be in a better place, God forbid, there is a recession and, of course, there is a possibility of a recession,” House Speaker Daniel Perez, R-Miami, said. “Do we know whether or not it is going to come? None of us in this room know that. But what we do know is if we are in that position, God forbid, one day, the state of Florida will be prepared.”
But some Democrats and other critics opposed the proposal, which involves putting $750 million a year into a state rainy-day fund. They said lawmakers should instead use the money to address needs such as raising teacher pay and providing health care to children.
“We have so many needs and obligations that are still unmet,” Rich Templin, a lobbyist for the Florida AFL-CIO, told the House Budget Committee. “Why would we take money and put it in our retirement account?”
The proposed constitutional amendment (HJR 5019 and SJR 1908) involves an already-existing reserve known as the Budget Stabilization Fund. The fund is capped at 10 percent of general-revenue collections, or about $4.75 billion in the current fiscal year, according to a House staff analysis. Under the proposal, the cap would increase to 25 percent, with a requirement to transfer $750 million into the fund each year.
The proposal couldn’t go before voters until November 2026. In the meantime, lawmakers would set aside $750 million a year that would later be transferred to the fund if the constitutional amendment passes.
The Budget Stabilization Fund was last tapped when state revenues plunged during the 2008 and 2009 recession, lawmakers said.
Democrats on Thursday questioned the need to mandate putting money into the Budget Stabilization Fund when lawmakers can already make such payments. Rep. Christine Hunschofsky, D-Parkland, said she doesn’t mind increasing the Budget Stabilization Fund cap to 25 percent, but that the state needs flexibility to deal with unexpected problems.
House Budget Chairman Lawrence McClure, R-Dover, said when money is left in what is known as “unallocated” general revenue, “government has a tendency to spend it.”
“We are doing this (proposal) so we are truly prepared for a break-the-glass situation,” McClure said.
As lawmakers try to finalize a budget for the 2025-2026 fiscal year, which will start July 1, questions also have swirled about potential federal spending cuts that could affect programs such as Medicaid, university research and the Supplemental Nutrition Assistance Program.
Senate President Ben Albritton, R-Wauchula, said the proposal “makes Florida’s balance sheet more durable in difficult times, and we’re setting more money aside to have its rainy-day reserves if things get difficult.”
The House Budget Committee voted 23-4 to approve the proposal, while the Senate Appropriations Committee approved it 14-3. The full House and Senate would need to pass it before what is expected to be the June 16 end of the legislative session.
Also Thursday, the committees approved a measure that would transfer $250 million a year to reduce state debt. Meanwhile, House and Senate leaders have agreed to provide about $350 million in permanent sales-tax exemptions, though details of the targeted exemptions have not been released.
House Appropriations Chairman Ed Hooper, R-Trinity, suggested Thursday another $300 million might be set aside for what are known as “non-recurring” tax breaks that include a series of sales tax holidays.
Albritton voiced support for making permanent annual tax holidays on back-to-school supplies and hurricane supplies. But Perez in the past has expressed skepticism about tax holidays.
The House and Senate could not reach agreement before the scheduled May 2 end of the legislative session on a budget and tax cuts. Conference committees began meeting Tuesday to negotiate details of the budget in various subject areas such as education, health care and criminal justice.
The conference committees ended their work Thursday, with unresolved issues going to McClure and Hooper for further negotiations.