STIMULUS BILL MAY NOT ALLOW REPAYING OF RAIDED TRUST FUNDS

By KEITH LAING, THE NEWS SERVICE OF FLORIDA

www.newsserviceflorida.com

THE CAPITAL, TALLAHASSEE, Jan. 26, 2009……….A legislative plan to repay money taken from the Lawton Chiles Endowment with money from the stimulus package being debated by Congress could be tripped up by the bill authorizing the expenditures.

Lawmakers have promised supporters of the Chiles endowment that they will put back the $700 million they are taking from that trust fund to plug a $2.3 billion hole in the state budget with money they get from Congress.

However, the bill (H.R. 1) currently being debated in the U.S. House that would allocate the proposed $825 billion stimulus says that Medicaid funding would not be increased to states that use the money to repay rainy day funds or reserves.

Florida’s federal Medicaid boost could be more than $4.3 billion if it does not violate the conditions of the authorization bill. The state/federal program serves more than 2.2 million Floridians and the current stimulus plan calls for the feds to pay a higher percentage of matching funds.

Officials in the offices of Gov. Charlie Crist, House Speaker Ray Sansom and Senate President Jeff Atwater would not comment on the possibility that repaying trust funds could adversely affect the state receiving extra Medicaid money. All three offices said they were monitoring the stimulus’ legislative process and that it was likely to change before being signed by President Barack Obama.

“We are currently monitoring the federal proposals and how they could impact Florida,” Crist spokesman Sterling Ivey told the News Service Monday. “The legislation is in the infancy stages and may be changed before a final bill is signed by the president.”

“There are understandably many unanswered questions about the federal stimulus bill,” Sansom spokeswoman Jill Chamberlin said. “I don’t think we can speculate on details at this point.”

However, Sansom announced Monday that he was planning a joint meeting with the chairs of the House’s appropriations councils to better understand the federal stimulus package . Sansom did not set a date for the meeting, but he said the House would hold a public hearing with Reps. Marcelo Llorente, R-Miami, David Rivera, R-Miami, and Dean Cannon, R-Winter Park, the House’s top budget writers for health care, education and taxes.

Sansom said that the stimulus package itself would not cure the state’s economic woes – after plugging a $2.3 billion hole in the 2008 budget, lawmakers are facing a possible $4 billion deficit in 2009 – but the speaker did say it was important lawmakers understand the package.

“We must be proactive in our approach and do our best to understand how any proposed federal stimulus package would affect our ability to balance the state budget both in the current year and in future budgets,” he wrote in an e-mail to members of the House. “It has been reported that many of these federal dollars will have significant strings attached to their use. We have an obligation to understand the commitments we would be making by using these federal stimulus dollars to balance Florida’s budget.”

Lawton “Bud” Chiles, the son of the former governor who won the tobacco settlement that fills the Chiles Endowment, said that the provision tying Medicaid funding to not repaying trust funds did not make him doubt the state’s promise to repay because he was already not convinced.

“I’d like to see them keep their first promise of paying back the $350 million they took before they get to the second promise about this $700 million,” Chiles said. “Put me down as skeptical. I’m totally in wait-and-see mode.”

Chiles and some of the lawyers who helped win the tobacco settlement have repeatedly threatened to sue the state if it does not keep its repayment promise, and Chiles said Monday that the family was reserving their legal options. However, he said the state could possibly work around the Medicaid provision by repaying the fund out of general revenue once the federal money arrives, instead of using the incoming dollars.

–END–
1/26/2009

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