Florida's budget gap could be as high as $3.2 billion

House Speaker Larry Cretul formally started the state budgeting process today by telling legislative money managers there will be no new taxes or fee hikes -- and that they should use Florida's shrinking revenue pot to fund education, health services and public safety above everything else.

In releasing his allocations for various House appropriations panels, Cretul said the state faces a gap of $1.1 billion and $3.2 billion between expected revenues and projected spending. The precise figure will be known later in the just-started legislative session, when the Revenue Estimating Conference meets and fiscal forecasters know more about what the state can expect in federal revenues or sources like a Seminole casino compact that is pending before the Legislature.

Cretul said the gap could grow as high as $5 billion when federal stimulus money runs out next year.

"Consequently, significant reductions to recurring state spending will be needed to achieve and maintain a balanced budget," Cretul wrote in a memo accompanying his fiscal allocations. "This will be more difficult than in previous years because the low hanging budgetary fruit has already been picked."

Gov. Charlie Crist's budget recommendations in late January depended on revenue from the Seminole compact and major federal funding. Cretul said in his opening remarks as the session convened on Tuesday that he was not counting any dollars not already approved or known to be coming in the form of taxes and fees.

He said House principles for building a budget will start with "no new or increased fees or taxes." The state will have to offset property tax revenue losses for public education, but he said there will still be "significant reductions in education services or programs."

Loss of federal stimulus funding for Medicaid must also be offset, while continuing mandatory programs, Cretul said. He said his budget allocation was an increase of 19 percent in state health-care funding, but as with education, even that increase would not be enough to avoid service and program cuts.

Law-enforcement and prison funding will be enough to make sure prisoners serve 85 percent of their sentences and the courts continue operation, the speaker said, and he wants a 5 percent reserve held back to protect Florida's bond rating.

"Prioritize education, health and public safety over program areas such as transportation, general government and environment," Cretul told House budget committees, "even though funding in the latter two areas make up a very small portion of the state budget."