Florida’s debt level dropped this year for the first time in at least 20 years — helped along by Gov. Rick Scott’s veto of some $135 million in university construction borrowing and a two-year halt on environmental land buys, the governor and Cabinet were told Tuesday.
Florida’s debt level slid to $27.7 billion this year — down $500 million from last year’s record high. That’s a sharp contrast from a year earlier, when $2 billion in additional borrowing pushed state debt to double what it was in 2000, according to the state’s Division of Bond Finance.
Ben Watkins, head of the division, said the state still will have to spend $2.2 billion in next year’s budget just to cover payments on the IOUs. That’s actually up $100 million from last year because of timing of the state’s bond issues. But refinancing of existing debt has saved the state millions this year, Watkins told Scott and the Cabinet.
Fifty-seven percent of what the state owes stems from school, college and university construction. Scott last year, took steps to rein-in that spending with his veto of university building projects, including $3.2 million for new roofing and other work at Florida Atlantic University.
The only significant university construction work Scott allowed to become law was $35 million for work at the University of South Florida Polytechnic’s Lakeland campus, which was advanced by Senate budget chairman J.D. Alexander, R-Lake Wales.
Scott, who was elected with strong tea party support, has been outspoken in his push to stem Florida’s rising tide of red ink.
Since former Gov. Jeb Bush took office in 1999, ushering in a dozen years of Republican leadership, Florida’s borrowing has climbed by $12 billion. Roughly $10 billion more debt is expected to be issued through 2019, to cover currently authorized programs, the bond finance division said.
Public school and university construction projects, roadwork and environmental land purchases have driven much of the borrowing, records show. Major tax cuts enacted during Bush’s two terms and recession-forced budget reductions also helped steer lawmakers away from a pay-as-you-go approach in many spending areas.
The economy, however, has helped change the state’s spending policies. The Florida Forever land-buying program, which formerly used to borrow $300 million annually to preserve environmentally sensitive lands, has been mostly on hold the past two years.
The state’s gross receipts tax, which supports school construction projects, also has been declining. The tax is built on levies imposed on utilities — but the economic downturn and societal shift away from land-line telephones has dramatically reduced the dollars available for campus construction.