Is there a shell game afoot on stimulus money?
A reliable source, speaking on background, told Sunshine State News that Florida budgeteers may be considering ways to use federal stimulus dollars to pad state reserves.
Propping up the reserve fund is a high priority of House Speaker Larry Cretul, R-Ocala, who wants to establish a Florida Savings Fund to guarantee that the state maintains adequate cash reserves to protect the state's AAA bond rating.
But, using any portion of the $6 billion the state receives in federal stimulus dollars this fiscal year to build up a "rainy day" surplus appears problematic, since Washington specifically earmarks most of its money.
A legislative aide, speaking on condition of anonymity, suggested that lawmakers could get around that prohibition, however.
"Stimulus money could be used to replace general fund money in certain categories, and that GF money could then be put into reserves," she said.
Building up a reserve fund against further shortfalls next fiscal year makes sense, according to Florida TaxWatch President Dominic Calabro. "It's like any restricted fund, but if it's used to free up General Fund dollars and those dollars are then put into reserve -- there's nothing wrong with that legally, morally or financially."
There would be a problem only if the stimulus money were put directly into reserves.
"The government-services portion of the state fiscal stabilization fund in the American Recovery and Reinvestment Act (ARRA) is discretionary, with certain limitations," explained Sterling Ivey, Gov. Charlie Crist's press secretary. But, he added, "ARRA funds are prohibited from being used to build up reserves."
Robert Weissert, a policy analyst for Florida TaxWatch, said that while moving stimulus funds around may be permissiable, "to be really good stewards, policymakers must focus on improving government, not playing shell games.
"They should be looking to streamline operations and reduce costs just like Florida families and business have to do," he said.
TaxWatch, which released a report Thursday identifying $3 billion in potential budget cuts, advocates "focusing resources on things that are efficient," Weissert said. "That's government's fiduciary duty."
Eliminating so much money from the budget isn't easy, largely because it's so hard to find, said Calabro. "But there's still some low-hanging fruit. Kurt Browning pointed out $40 million could be recouped from collecting corporate income tax that is waived. And, Alex Sink came up with $15 million to $20 million in paperclips and other purchase items.
"If you get rid of the top bureaucrats and excessive benefits, you save still more. You try to prioritize. You don't get rid of core services. We flatten the organization and get rid of assistant secretaries and so on. What we want to get to is the point of being a less bureaucratic government," Calabro said.
Among the 88 savings ideas proposed by the TaxWatch report and their anticipated savings:
Increase the use of state term contracts ($200 million in first year).
Reduce Florida Retirement System employer contributions by requiring employee contributions for new hires ($255 million).
Increase penalties for Medicaid overbilling ($104 million).
Employ competitive contracting in providing non-instructional services for K-12 schools ($300 million).
