With General Revenue Dwindling Agencies Turn To Trust Funds

Sep 23, 2016

Florida's Cabinet
Credit Nick Evans

Florida’s Cabinet recently got a first look at state agency budget requests.  With budget projections showing empty state coffers, those agencies are eyeing state trust funds.

A total of six executive agencies presented budget requests for the coming year at Tuesday’s cabinet meeting.  But there could be dark clouds hanging over some of those plans.  State economists are warning lawmakers money is beginning to run short, and next year’s budget may be in for some serious belt tightening. 

“We’re certainly sensitive to the situation there,” Office of Insurance Regulation chief David Altmaier says, “but we think with the regulatory trust being in the condition that it’s in, it’s a minimal budget request.  So we’re optimistic, but of course we understand the key decisions the Legislature has to make.”

Altmaier is asking for $31.6 million.  That’s about $700,000 more than the current year, but like he said, the money comes from a trust fund—not the general revenue pool where forecasters are projecting a shortfall.  Altmaier says the bulk of the money would go toward salary increases for low level employees.

“What we would like to do is make sure that some of those folks that come into the entry level OIR positions have some incentive to stay around,” he explains.  “They develop skills that are critical for a regulator to have and when they leave we have to develop somebody else.”

Other agencies are emphasizing their reliance on trust funds instead of general revenue, as well. 

“So that is all spending authority, it’s currently out of trust funds, so there’s no general revenue associated with this,” Florida Department of Highway Safety and Motor Vehicles director Terry Rhodes tells cabinet members. 

Rick Swearingen heads up the Florida Department of Law Enforcement, and he’s asking for $12 million out of the shrinking general revenue fund.  But he has a back-up plan.

“I ask for what we need,” he says.  “The crafting of the—where the money comes from falls on the Legislature, but we do have an ability to shift some of that funding to our operating trust fund.” 

“So that’s the good news,” he goes on. “Yes, general revenue may be down but we can shift some of that to our operating trust fund.”

Meanwhile Lieutenant Colonel David Sutphin of the Department of Veterans Affairs is asking for a little over $8 million in general revenue—with the bulk of it going to two veteran’s homes.

“I’m certainly not going to take money away from starving children or families in need out there but we’ll find a way, maybe through our trust fund, to move some things around—with help from the Legislature,” Sutphin says, “if I have to do that in order to get this home built for the veterans that have great need.” 

“We’re supposed to have 4,049 beds.  I have 870 beds in the state of Florida.”

Securing those funds will be important especially for FDLE and Veterans Affairs.  In the wake of the Pulse nightclub shooting, FDLE’s Swearingen is hoping to hire 46 new counterterrorism officers.  On the veteran’s home issue, the federal government is ready to nearly double the state investment, but not until Florida antes up.  There’s still a long way to go before the budget process begins in earnest, and agency requests could still shift.  What’s more the governor and the Legislature will all have their chance to weigh in on agency expenditures, with lawmakers deciding who gets what.