Gov. Rick Scott's plan to eliminate 14 trust funds ran into a bipartisan buzz saw at the Senate Subcommittee on Transportation, Tourism and Economic Development Tuesday.
Seeking more budget flexibility, the governor proposes to redirect hundreds of millions of trust-fund dollars into the state's general revenue pot.
"The elimination of 14 funds is the pivot point of the governor's budget," said subcommittee chairman Don Gaetz, R-Niceville.
"In the past, the Legislature has swept trust funds time and time again. We've done the bait and switch. The governor is saying 'let's be honest.'"
All told, the state has 124 trust funds containing $8.5 billion. Some, but not all, of that money would be redirected to the state's general revenue fund under Scott's budget reorganization.
But the prospect of shutting down funds altogether drew heavy return fire from committee members, some of whom voted to raid trust funds in previous sessions.
Sen. Mike Bennett, R-Bradenton, defended the Sadowski housing trust fund, noting that its revenues derive from document-stamp fees.
"Homebuilders and Realtors agreed to tax themselves. I will fight to the end of term limits to keep them," Bennett said.
Sen. Mike Fasano, R-New Port Richey, seconded Bennett's emotion, saying, "Sadowski was set up for a purpose. The dollars go back to the communities."
Sen. Gwen Margolis, D-Miami, likened shuffling funds to "cutting off our nose to spite our face."
"To take money out of housing is so shortsighted. It's wasting money. It's ridiculous," she said.
Margolis' concerns were shared by fellow Democrat Eleanor Sobel of Hallandale Beach.
The housing trust fund, which currently has a $123 million balance, would go into the general revenue pool under Scott's plan.
Millions of dollars in other state funds -- ranging from transportation to tourism to professional sports -- would also be "zeroed out" and placed in the general fund. Only designated federal dollars would remain in discreet accounts.
Gaetz supported the governor's initiative, pointing out that "the whole purpose is to have more flexibility, with more funding, to meet emergent needs."
"The fact is, we don't need to build any more houses. We need to dispose of inventory," Gaetz said of the Sadowski fund.
Upon questioning from the panel, a representative from the state agency that administers housing dollars said little or no funds were being used for new construction. Instead, more outlays are directed to down-payment assistance on existing dwellings and rehabbing rental units.
He cited statistics indicating that every $1 million spent from the state's housing fund nets $7.6 million in economic activity.
Eliciting chuckles, Gaetz riposted facetiously that if only more money were spent, the state could balance its budget.
Addressing the issue of redirecting Sadowski's earmarked fees, Sen. Jim Norman went to the right of Scott and suggested that contributing homebuilding and Realtor groups be relieved of their financial obligation if the trust fund is disbanded.
"Maybe we should just repeal the fees instead of throwing them into a big pot," the Tampa Republican said.
Summing up her criticism of the Scott shuffle, Sen. Lisbeth Benaquisto, R-Wellington, said, "All 14 trust funds had an intended mission. I don't see clear articulation that dollars will be extended for the purpose they were collected. Don't just do this to plug a (budget) hole."
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Contact Kenric Ward at kward@sunshinestatenews.com or at (772) 801-5341.
