Gov. Ron DeSantis signed a bill Wednesday that will terminate and liquidate the Lawton Chiles Endowment Fund (LCEF).
Named after former Florida Democratic Gov. Lawton Chiles, the Legislature established the fund in 1999 to pay for health programs and education in the state.
But now, under the newly signed bill (HB 5011), the fund will dissolve, and the balance will fold into the Budget Stabilization Fund. According to a staff analysis, the program is valued at $958 million.
Proponents of the liquidation, including Republican Rep. Jay Trumbull and Senate President Wilton Simpson, suggested the liquidation will protect the funds from future sweeps.
They also argued the move would provide greater flexibility for the funds.
“The more secure we can make that money, the better,” Trumbull said in April. “We are not taking away the programs. Most of those programs are paid for out of the Tobacco Settlement Trust Fund. So, all those medical programs, those will all be the same.”
The Legislature created the LCEF with $1.7 billion gained through the state’s settlement agreement with tobacco companies.
Over the years, however, the fund proved vulnerable to sweeps, according to a staff analysis.
In 2008 amid the financial crisis, for example, $700 million was transferred from the LCEF to the general revenue fund to offset a projected shortfall.
Then, in 2013, lawmakers transferred another $350 million from the fund to the general revenue fund.
“During previous emergencies and economic downturns, the LCEF has been used to offset shortfalls in (general revenue) and to provide for emergency spending,” the staff analysis highlights.
While Republicans widely supported the measure, Democrats voiced various concerns.
“Would you be voting for this today if this was the Ronald Regan trust fund?” Democratic Rep. Joseph Geller asked. “Don’t be disrespectful.”
House Minority Leader Even Jenne, meanwhile, argued that funding for health care is paramount during the pandemic.
“All these enhancements that have been made to public health via the Lawton Chiles Endowment Fund, we’re going to sweep it all away in the middle of a pandemic? Members, I just feel this is short sighted policy,” Jenne said.
The bill will take effect July 1.