The budget cuts 695 jobs, eliminates pay raises for all but state troopers, forces layoffs of teachers, nursing home and child welfare workers and affects hundreds of private businesses that perform work for the state.
The result is likely to be a loss of $6 billion in Florida's economic activity over the next year, a deepening of the recession and an increase in unemployment, said David Denslow, head of the University of Florida's Bureau of Economic and Demographic Research and a frequent advisor to the Legislature.
''Fewer people will go to restaurants, buy new cars and spend money on local vacations, and that has a further effect on the economy,'' he said, noting that every dollar cut from state spending translates to $1.50 in lost economic activity. ``A reduction in state spending is one of the mechanisms through which a recession spreads.''
`VICIOUS CYCLE'
Denslow's warnings mirror the arguments Democrats have raised for days, and other economists agree. Bruce Nissen, director of Research at the Center for Labor Research and Studies at Florida International University in Miami, said those who have the least will be affected the most.
''Cutting expenses helps to slow the economy further, and people who rely on those services depend on them more,'' he said. ``You've got kind of a vicious cycle.''
The House approved the proposed $66.2 billion budget Thursday by a largely party-line 75-44 vote, with Rep. Mitch Needleman of Melbourne the lone Republican voting no. The Senate will send the spending plan to the governor on Friday.
Legislators say the budget includes a net reduction of 695 jobs. The number of layoffs is actually higher, but they are offset by an increase of 916 guards to staff three new prisons. Those prisons will cost $305 million, $10 million more than what the budget spends on classroom construction.
Meantime, probation officers, state attorneys and public defenders all face staff cuts. The budget also shutters 13 driver license offices around the state and closes two state revenue offices.
To soften cuts to healthcare and education, the budget shifts $300 million in road money into those programs. But nowhere are the job cuts more stark than those that affect nursing homes and programs for the disabled.
Nursing home administrators and their union members say the $163 million in cuts, on top of $75 million trimmed this year, could shut down some nursing homes and force as many as 3,500 layoffs. But even they say they're not as bad off as those who run homes for people with developmental disabilities such as Down Syndrome or cerebral palsy.
SERVICES REDUCED
Over two years, programs for the disabled will have sustained about $180 million in reimbursement-rate cuts -- a 20 percent reduction -- and program administrators say it could seriously limit services to as many as 8,000 people.
''Homes won't be able to stay open. People will lose their jobs. The needy will lose their services,'' said Jim McGuire, executive director of the Ann Storck Center, a Fort Lauderdale home that serves up to 300 people.
''As of July 1, we're going to begin a rapid economic downturn and the meter starts ticking and we're day-by-day to see how long we can stay open,'' he said.
As legislators debated the budget in the House, Democrats asked what effect the layoffs will have and blamed 12 years of Republican tax cuts for exacerbating the current budget crisis.
''This is the culmination of a bankrupt strategy,'' said Rep. Keith Fitzgerald, a Sarasota Democrat. ``Where we see ourselves now is blind incrementalism.''
Democrats pushed unsuccessfully for alternatives to budget cuts that include closing loopholes on corporate taxes and out-of-state companies, giving horse and dog tracks video slot machines, raising the cigarette tax by $1 and dipping more deeply into reserves and using the money to offset the deepest cuts and invest in economic stimulus.
''You can't get out of a recession by cutting your way out. You have to get out by investing your way out,'' said Sen. Jeremy Ring, a Margate Democrat who criticizes the cuts to the economic development programs designed to boost university technology research.
Nissen of FIU said it all comes down to a question of philosophy. By cutting the budget, legislative leaders may be thinking they will ``let the economy take its course and it will eventually reach rock bottom.''
The only other option, he said, is the fiscally liberal view: ``In an economic downturn, government spending should go up.''
Rep. Ray Sansom, the House budget chief, told legislators after their budget debate that they rejected that idea.
''We didn't fall into the easy trap of raising taxes,'' he said. ``We didn't borrow money, we didn't spend money we didn't have. . . . We didn't expand gambling.''
Sen. Jeff Atwater, a North Palm Beach Republican, said the budget strikes a balance and uses every option lawmakers had.
''There's only a finite numbers of options: borrow more money, spend your savings account or try to cut back,'' he said. ``To some extent, we tried to do everyone of those.''
TIGHT CREDIT MARKET
Denslow of UF said that in past economic downturns, state governments have relied on additional borrowing to build roads, schools and buildings to offset some of the job losses and stimulate economic activity, but the tight credit market has made that more difficult and risky.
''This is a recession where the crunch in the credit markets was a big cause of the downturn,'' he said. ``There's not a whole lot a state government can do to stimulate the economy. The federal government has the luxury of being able to print money. The state can't.''
Gov. Charlie Crist said he's not worried. Asked about potential ill effects the budget cuts have on the state's economy, the governor ducked the question.
''I'm very pleased with what the Legislature's been able to do,'' he said.
Miami Herald staff writer Marc Caputo contributed to this report.
