Is the governor talking out of both sides of his mouth?
Yes and no.
The governor doesn't write the actual budget, he just proposes it. So his proposal is based on data from November forecasts that predicted a $2.5 billion budget shortfall and relied on optimistic assumptions about the passage of Amendment 1. Legislators say those assumptions may be out of date.
Crist predicted that the amendment -- which increases the homestead exemption on residential property and lets homeowners keep their tax savings when they move -- would ''reignite'' Florida's housing market.
So his proposed budget assumes that, without increasing taxes, there will be an increase in property-tax collections of $338 million to pay for schools anyway, and his budget proposal replaces the $138 million in school funds that schools will lose because of the amendment.
NEW DATA
But legislative leaders are not buying it -- and they're the ones who will have the final say. They will write their budget based on new February data and they worry that the drop in real-estate values and decline in new construction won't produce the $338 million in new tax revenues the governor expected.
''I certainly think that is overly optimistic,'' said Rep. Joe Pickens, the Palatka Republican who oversees the House panel in charge of school spending.
If the governor's estimates fall short, lawmakers have the option of taking money from other programs to pay for school spending and to offset the $138 million lost to Amendment 1.
And of course there is the other option: Raise local property taxes. Pickens acknowledged it may be a tough year to lower school taxes, but he added: ``I certainly don't think you will see any increase.''
Lawmakers will write the next budget, for the fiscal year that begins July 1, based on economic forecasts generated at the end of February. Since November, housing statistics show the market has come to a halt, state tax collections have dropped millions more below projections, and state economists have concluded their fall estimates were too rosy.
''It may be more of a faith-based budget than one grounded in reality,'' said House Democratic Leader Dan Gelber of Miami Beach. ``At least the governor recognizes that Florida can't sustain massive cuts to education, healthcare, and public security.''
`VERY CHALLENGING'
The Senate's top budget chief, Sen. Lisa Carlton, an Osprey Republican warns about the governor raising expectations too high.
''There are many pieces of information that the Senate will use to build a budget this year,'' she said. ``The most significant will be the next revenue estimating conference numbers. Make no mistake; this is going to be a very challenging budget year.''
Florida's school funding formula boils down to this: School districts use local property taxes to raise money that is then matched by the state, primarily from sales taxes. The state historically had the greater share, but as property values soared, the GOP-controlled Legislature shifted more of the burden away from the state and onto local property owners.
From 1999 to 2007, the share of local taxes used to pay for public schools rose from 38 percent to 46.7 percent. That enabled the Legislature to pump more money into schools, but it also meant they weren't rolling back property taxes.
Now the good times are over. The value of homestead property, which was rising two years ago, is projected to have dropped 4 percent from Jan. 1, 2007 to Jan. 1, 2008, according to state economists. And new construction, which is expected to continue, will drop 30 percent below last year's levels.
The governor's projections are based on predictions that commercial and industrial property will continue to increase in value and that new development, while slower, is still accommodating 800 newcomers each day. He is counting on a 3.2 percent overall increase in the tax roll next year.
State economists are wary of that optimism now, however.
''Property-tax revenue has become less certain than in the past,'' said David Denslow, a University of Florida economics professor. Any attempt at forecasting, he warns, is likely to ``miss the target.''
If legislators were to adopt the governor's spending plan, it would raise the local government share of the education budget to a record 46.9 percent. If property values decline and revenues fall, school districts would have to raise tax rates to balance their budgets. That could cut into the $876 million in tax savings voters were expecting in 2009 because of Amendment 1.
`THE SPIGOT IS OFF'
Gelber, the House Democratic leader, says it's further proof that the Republican-led Legislature has relied for too long on the state's real-estate engine to fuel its spending growth.
''The spigot is off,'' he said. ``There may not be anything more.''
He warned that the solution may be a long time coming.
''This crisis is 10 years in the making,'' he said. ``You're not going to solve it in a budget cycle.''
