A bill to eliminate a health care fund by shifting its contents to the state’s general fund reserves piqued Democrats during a House floor session Wednesday.
The Lawton Chiles Endowment Fund (LCEF) was established by the Legislature in 1999 to fund health programs in the state.
The fund, named after former Florida Gov. Lawton Chiles, is valued at $958 million. It was started with $1.7 billion using money from the state’s settlement agreement with tobacco companies.
The bill (HB 5011) eliminates the LCEF and redirects the funds to the Budget Stabilization Fund and unallocated general revenue. Under the bill, the LCEF would be liquidated by the end of June 2022.
An analysis of the bill stated that shifting LCEF funds into the state’s general fund reserves will “maintain Florida’s high credit ratings and stable financial outlook.”
Rep. Jay Trumball is carrying the bill for the House Appropriations Committee. He fielded several questions from Democrats during the bill’s second reading in the House.
“I understand the short-term logic of getting that money in during a pandemic. But what, if any, are the long-term benefits that the state can see from this endowment being terminated? Because as I understand it, as you said, it is in the hundreds of millions of dollars that this fund has generated,” House Minority Leader Evan Jenne asked.
“The more we put in reserves the higher our bond rating will be,” Trumball responded.
Trumball also said in response to questions from Rep. Dianne Hart that payments from the tobacco settlement will continue to be used for health care.
This would not be the first time funding has been transferred from the LCEF to the state’s general revenue fund.
After a budget shortfall during the 2008 financial crisis, $700 million was transferred from the LCEF to the general revenue fund to offset a projected shortfall. The transfer was approved during a Special Session to reduce the state budget. Legislators said the funds would be repaid, but no repayments have been made.
Another $350 million was transferred from the LCEF to the general revenue fund during fiscal year 2012-2013. The transfer was also supposed to be repaid and included a repayment schedule that required the full amount to be repaid by July of this year. So far, only one repayment of $45.3 million was made in fiscal year 2013-2014.
The bill heard Wednesday does not say the funds would be repaid.
After its second reading the bill is ready for a House vote.