DeSantis vetoes $1 billion from state budget as COVID crisis hurts tax revenue

Gov. Ron DeSantis announced more than $1 billion in vetoes to the state budget on Monday in an effort to blunt the state’s economic fallout from the coronavirus.

The cuts bring the state budget to $92.2 billion while setting aside more than $6.3 billion in reserves to withstand expected shortfalls over the next fiscal year, which starts Wednesday.

“Everyone understands the circumstances have changed,” DeSantis said during a news conference in the Capitol on Monday. “I think we all have to recognize that none of us are going to get everything that we want.”

DeSantis had warned last week that the pending cuts would be “the veto equivalent of the Red Wedding from ‘Game of Thrones,’ ” referring to a dramatic scene from the hit HBO show in which some of the main characters were betrayed and killed by their allies from the HBO show.

But in reality, he kept some of the biggest issues passed by lawmakers this session, including measures that had widespread bipartisan support:

▪ $500 million for teacher raises.

▪ A 3% pay raise for all state employees, including himself and the three members of the Cabinet.

▪ Giving corrections officers another $500 to $2,500 depending on their experience.

▪ $100 million to buy and preserve land around the state.

His vetoes instead focused on local spending projects and smaller-ticket items, including:

▪ Millions of dollars in local wastewater and environmental projects.

▪ $135 million for schools that perform well in the annual A-F state grading system that former Gov. Jeb Bush established two decades ago.

▪ $28 million in hepatitis C treatment for prison inmates, which was required under a settlement agreement with the federal government.

▪ $20 million for a 2nd District Court of Appeal courthouse in St. Petersburg.

Over the years, lawmakers have protected the money that goes to schools that earn high grades even as critics clamored for the money to go into other aspects of education. This year, some pushed for the amount to go into educators’ salaries. Because of COVID-19, the state canceled spring 2020 testing, on which school grades are largely based.

DeSantis said the amount of money vetoed was unprecedented for a Florida governor.

“Nobody has ever made more vetoes than I did right here,” he said. “I don’t think they’ve ever vetoed a billion dollars.”

But just three years ago, former Gov. Rick Scott vetoed nearly $12 billion, including nearly the entire education budget, which prompted lawmakers to return to Tallahassee for a special legislative session.

Legislators knew trouble was brewing

When lawmakers passed their version of the budget in March, they knew it could be drastically different by the time it took effect on July 1. The same week they passed the record $93.2 billion budget, the state saw a historic surge in unemployment claims as Floridians began to stay home to avoid COVID-19.

Sales taxes, the revenue lawmakers use to pay for schools, state agencies and other projects, have plummeted since March. State revenues are $1.45 billion below their pre-coronavirus estimates, state economists announced Friday. Moody’s Analytics predicts that Florida will have an $8 billion revenue shortfall.

DeSantis said he was plugging the holes by eliminating 203 vacant positions in state government, $20 million in the state job growth grant fund and not spending $1.5 billion in trust fund money. He also expects to receive billions from the federal government in CARES Act money.

“These were not easy decisions, but at the end of the day, I think we threaded the needle by preserving some of the historic achievements that this session brought,” he said. “I think we’ll be able to weather the storm.”

Not everyone agrees

DeSantis’ budget decisions were quickly criticized by Democrats, however.

“Without consulting the Legislature or any elected Democratic leaders, Ron DeSantis made massive budget cuts that will impact the lives of all Floridians,” the state’s Democratic Party chair, Terrie Rizzo, said in a statement. “DeSantis must own the consequences of these cuts, which will inevitably hurt our schools, our children, and our families.”

The budget also poses a political balancing act for the Republican governor. With coronavirus causing a dramatic downturn in sales taxes, the state’s budget crisis could become so deep that it could force lawmakers back to Tallahassee.

But Republicans, who control both chambers of the Legislature, have resisted returning to the capital before the November election, in part because they fear Democrats would instead use the time to blast them over the state’s unemployment woes and other issues related to the state’s response to the coronavirus.

Florida legislators allocated $25 million for the Department of Health to address the coronavirus crisis for the 2020-21 budget year, and then adjourned the session suggesting they would come back to alter the budget when they knew more. But legislative leaders have decided they won’t be coming back after all and will allow the governor to use his emergency power to shift funds around.

Is that constitutional?

Democrats have raised questions about the constitutionality of allowing DeSantis to allocate money when only the Legislature is authorized to appropriate state funds, accusing legislative leaders of ceding budget and public health oversight authority to the governor.

Leaders of Florida’s Republican-controlled state House and Senate say there will be plenty of time to address these issues.

Florida has $4 billion in reserves and is expected to receive an estimated $6 billion or more in federal CARES Act money.

Meanwhile, the increased costs of healthcare spending for more people applying for Medicaid, the loss of fees and funds to dozens of other programs, and the sheer increased costs of personnel, sanitation and even oversight will create new and unprecedented challenges.

State statute requires that anytime state economists determine the drop in revenues exceed 1.5% of the budget reserves in the general revenue fund, it triggers action: The governor can either make across the board cuts or call legislators into session to do it. What remains unknown is which approach the governor will take.

The federal government has begun helping Florida by steering funds to help replace some of the vetoed programs. Last week, officials announced the state had received $240 million in federal CARES Act money to help families hit hard by the coronavirus pandemic pay rent and mortgages. Half of it, $120 million, will be assigned to counties to give to its residents for rental and homeowner assistance programs.

Tampa Bay Times staff writer Jeff Solochek contributed to this report.

This is a developing story. Check back for updates.

This story was originally published June 29, 2020 at 1:28 PM.