The House lowered a budget offer, signaling some federal coronavirus relief funds could be banked, just as Senate budget Chair Kelli Stargel suggested Wednesday when the Senate earmarked $3.3 billion of an expected $10.2 billion.
Negotiations over the state’s likely $100 billion budget for the next fiscal year are ongoing. The negotiations include determining how to spend an expected $10.2 billion of Coronavirus relief funds headed to Florida from the American Rescue Plan (ARP) signed by President Joe Biden in March.
The House made a second offer Friday on how to spend the funds. The latest pass earmarks $6.2 billion. The House initially proposed spending nearly $8 billion of the federal funds.
Both House budget chief Rep. Jay Trumball and Stargel have said unspent coronavirus relief funds will go into the state’s unallocated general revenue.
“Not knowing exactly what the fiscal outlook is going to be next year, we’ll just park some money, have the ability to use that if need be or keep it in reserves if the economy continues to improve,” Trumball said.
Trumball reasoned banking the money helps the state’s credit rating.
“With the size of the state we have and the budget the size that we have, the more reserves, the better it helps our bond rating,” Trumball explained.
Democrats released a spending plan that totaled $10.1 billion, but are unlikely to have much say in the budget process since they do not have a majority in either chamber
“The American Rescue Plan was intended by President Biden to lift states out from under the damages of this pandemic,” Senate Minority Leader Gary Farmer said in a prepared statement.
American Rescue Plan spending parameters are more flexible than previous federal coronavirus aid packages. Guidelines allow state and local governments to use the funds to cover costs incurred through 2024.
Once in unallocated general revenue, the funding would be treated like all other unallocated general revenue, Trumball said. That means the funds would mostly be subject to appropriation by the Legislature, with some instances where the Governor can also spend the money. Neither Stargel nor Trumball committed to separately tracking the funds.
Language in the American Rescue Plan directs state and local governments to spend the money on the pandemic’s “negative economic impacts,” including increased pay for essential workers, preventing cuts to government services and investing in infrastructure.
To the House, this means holding on to a $1 billion dollar allocation for an Emergency Preparedness and Response Fund, which Democratic lawmakers have dubbed a slush fund for the Governor.
The Senate allocated no money to the emergency fund in its latest offer.
Proposed state laws surrounding the new fund stipulate it would be used for “preparing or responding to a disaster declared by the Governor as a state of emergency that exceeds regularly appropriated funding sources.”
Gov. Ron DeSantis likes the idea. His proposed budget also included a $1 billion allocation of American Rescue Plan money to start the fund.
An unemployment disagreement between the two chambers could also be weaseling its way into the complicated budget negotiation process.
The House budget designated $100 million toward a priority program from Speaker Chris Sprowls to revamp the state’s workforce infrastructure. The Senate has so far offered $50 million for the workforce revamp, but the upper chamber also gives just under $100 million to the state’s unemployment program. The House offers about half that amount for the unemployment program.
Sprowls has said his preferred unemployment fix for the state is to make it easier to connect unemployed workers with job opportunities and training through the workforce revamp rather than focus on unemployment benefits.
But the House’s new spending offer did get closer to the Senate in other areas.
The House backed off an initial proposal of $3.5 billion for a deferred maintenance program. The new offer is just $350 million, though the House met the Senate on a supplement to the construction costs for higher education and added a new line item for K-12 construction and maintenance. Both line items would add about $474 million to the Public Education Capital Outlay and Debt Service (PECO) Trust Fund.
The House doubled down on statewide water-related initiatives like flood mitigation. The lower chamber is now asking for more than $1 billion for the projects, which have been a stated priority for DeSantis. In that $1 billion, the lower chamber met the Senate on a $500 million septic-to-sewer program designed to deal with the increased water usage from Florida’s growing population.
The House also met the Senate on $300 million to a state conservation program called Florida Forever, $100 million to an “African American Cultural and Historical Grant Program” and $100 million to fix the recent disaster at the Piney Point Reservoir.
Another initiative favored by Sprowls to provide textbooks to students ate up $125 million of the House’s proposal. There’s nno offer from the Senate on that yet.