FL Senate leader: federal emergency funding may help state avoid steep budget cuts in coming year

Florida Capitol. Credit: Colin Hackley

Florida Senate President Bill Galvano says lawmakers may be able to avoid “significant budget cuts” in the coming year because of an influx of federal emergency funding related to the COVID-19 crisis and the state’s budget reserve funds.

Lawmakers concluded their 66-day annual session last month, passing a $93.2 billion budget that included major pay raises for teachers and state workers.

But the coronavirus outbreak has cast doubt on the state’s ability to fund the new budget, which begins July 1, because the pandemic has caused a shutdown of the state’s economy that is expected to undermine sales tax collections, the major state funding source for the budget.

But in a memorandum to senators on Thursday, Galvano, a Bradenton Republican, offered some fiscal optimism, while noting lawmakers will have a better idea of the virus impact in the coming months as analysts revise forecasts for Florida’s economy.

“In addition to the healthy reserve set aside this (legislative) session, the influx of federal funding under the CARES Act should help alleviate concerns regarding significant budget cuts to the 2020-21 fiscal year budget,” Galvano wrote in the memo. “Any line item vetoes Gov. DeSantis deems necessary (in the new budget bill) will further buffer the already healthy reserve.”

DeSantis has yet to receive the budget bill (HB 5001) and another 196 bills passed during the 2020 session. DeSantis has asked lawmakers to delay sending him the legislation for his review while he concentrates on state efforts to combat the COVID-19 outbreak.

At the time lawmakers passed the 2020-21 budget, they estimated it would include about $3.8 billion in reserve funds that could be used during an emergency.

Galvano said the state expects to receive some $12 billion from the CARES Act, the new federal economic stimulus package, with $8.3 billion aimed at helping the state and local governments “stabilize” their funding. The state would get $4.6 billion of that amount, with the local governments receiving $3.7 billion, he said.

The remainder of the $12 billion — $3.7 billion — in federal funding would be used for “specific programs within state government,” the memo said.

Galvano said lawmakers may have to return to Tallahassee at some point after July 1, when the new budget year starts, to adjust the state budget with the new federal funding.

“Based on our initial analysis of the CARES Act, we may need to return to Tallahassee, at the appropriate time in fiscal year 2020-21, to formally appropriate available federal funding,” he wrote. “We must be mindful our state budget impacts our constituents and our economy, and the decisions we make must demonstrate fiscal responsibility, while doing no harm.”