(The Center Square) – Senate President Bill Galvano said economists believe Florida’s $3.9 billion in reserves, including $2 billion in cash, should help the state absorb additional costs and lost revenues from the COVID-19 crisis.
Galvano told senators in an email, therefore, it is unlikely they will be called back to Tallahassee to reforge the budget they adopted two weeks ago.
If legislators convene a special session, he said, it will be to allocate the $12 billion Florida expects to receive from the $2.2 trillion federal Coronavirus Aid, Relief and Economic Security (CARES) Act.
The CARES Act (U.S. House Bill 748) provides approximately $8.3 billion for stabilization of the state’s budget and many local government budgets, and another $3.7 billion for specific state aid programs.
“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,” Galvano told senators Thursday. “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.”
The $93.2 billion budget lawmakers adopted March 19 sets aside $300 million to handle the coronavirus outbreak, boosting state reserves to $3.9 billion.
Many lawmakers believed the budget was made obsolete when they approved it by the unanticipated, dramatic decline in sales tax revenues and unexpected, sudden spike in demand for services, including mushrooming unemployment benefits and expanded Medicaid enrollments, fostered by the COVID-19 crisis.
The expectation was – and still is – they would be called to a specials session to deal with the damage after the viral outbreak peaks and before July 1, when the new fiscal years begins.
Gov. Ron DeSantis reported last week the state already had spent about $208 million responding to COVID-19, but he added, with federal assistance Florida will receive under the CARES Act, the state may not need to extract significantly from its reserves.
Galvano concurred Thursday.
“While we expect to see significant decreases in general revenue collections, beginning with the April General Revenue Collection Report through the end of our fiscal year, our current general revenue reserve cash balance, combined with other available state reserves, should alleviate any concerns regarding the need to cut the current year budget,” he wrote.
Galvano said Senate staff and the governor’s office are reviewing the massive CARES Act to sift whatever benefits the state can glean from it.
Florida state and local agencies, health-care providers and businesses also can tap into several funds created by the act, including a $130 billion hospital fund, $45 billion Disaster Relief Fund, $30.75 billion Education Stabilization Fund – $13.5 billion for school districts; $14.25 billion for higher education institutions – and $31.1 billion in assistance for health agencies, transit systems, National Guard deployments and election security, according to a Florida TaxWatch (FTW) analysis.
“In addition to the healthy reserve set aside this 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 said. “Any line item vetoes Gov. DeSantis deems necessary will further buffer the already healthy reserve.”
The governor, however, has not approved the budget and is no rush to do so, saying last week he was “going to let the budget sit for now. I’m not going to start vetoing everything, and I’m not going to sign it yet.”