After Blasting Obama, Scott Faces His Own Red Ink

By: John Kennedy, The News Service of Florida
By: John Kennedy, The News Service of Florida


Republican Rick Scott got plenty of political mileage during the governor’s race ridiculing the Obama administration for running up the federal deficit.

But now the governor-elect faces his own tide of red ink – with taxpayer-financed, state government debt already at a record $26.4 billion, and climbing.

“It’s worth getting a grip on this,” said Dr. Randall Holcombe, a Florida State University economist, who the governor-elect has named to his economic advisory council. “The debt represents more money that’s taken out of the private sector, and that’s what will create more jobs and more income.”

The state’s Division of Bond Finance is scheduled to release a report this month likely to show another $2 billion in IOU’s added to state ledgers this year, powered by the cumulative effect of heavy borrowing for public school- and university-construction projects, roadwork and environmental land purchases, officials said.

Florida taxpayers spent $2.1 billion last year just to service the debt, double the level of 10 years ago. But that annual payment is expected to endure until 2014, when it’s forecast to fall to $1.8 billion a year.

With the state facing a $2.5 billion budget shortfall next year, the debt payments loom large as lawmakers struggle to balance a roughly $70 billion state spending plan. And the borrowing flourished even while Scott’s own party, which touts fiscal conservatism, held the reins of state government.

Since Gov. Jeb Bush took office in 1999, ushering in a decade of Republican leadership in Florida, state borrowing has climbed by almost $10 billion, with another $10.2 billion in debt expected to be issued through 2019 to cover currently authorized programs.

Major tax cuts enacted during Bush’s two terms and recession-driven budget reductions taken later helped steer lawmakers away from a pay-as-you-go approach in many areas. Unlike Congress with the federal budget, Florida lawmakers are constitutionally required to balance the state budget each year.

But borrowing to finance major capital projects is common. And the sagging economy and the state’s accumulated debt have drawn both “stable” and “negative” outlooks from rating agencies, potentially costing taxpayers more in recent borrowing costs.

Scott said little about Florida’s debt during the campaign. Instead, Scott blistered Democratic opponent Alex Sink for using “Obama math” to downplay the scope of her own spending proposals.

But on his campaign website, Scott warned that “Florida is going down the path of California and Greece,” with its borrowing. He also said the “career politicians in Tallahassee are spending our state into bankruptcy.”

With Scott a month away from taking office, his economic advisors say debt reduction should be part of his drive to rein-in state government.

“What the magic number is, I don’t know,” said Robert McClure, president and CEO of the James Madison Institute, another of Scott’s economic counsels. “You want to limit those programs that are going to cost the state a lot of money in the short- and long-term.”

A Scott spokesman, Trey Stapleton, said, “Anything that affects the Florida economy and getting people back to work will be a priority for the new governor.”

But it won’t be easy. And there could be a push for lawmakers to rely even more on borrowed money to maintain spending for public schools, favored university building projects, and transportation – seen by many analysts as helping spur job creation in a state with more than 1 million unemployed.

A ballot measure was rejected by voters last month that would have softened the state’s class-size standards, meaning classroom space in Florida will continue to be in demand.

Also, for all Scott’s talk of taking on state government, the core of those named to advise him also counseled Bush during the period when state borrowing rose steepest.

Scott’s economic advisory council is led by Donna Arduin, who served as Bush’s budget director and later held a similar post under California Gov. Arnold Schwarzenegger. Arthur Laffer, who shaped the supply-side economics of former President Reagan and is now Arduin’s business partner, is another Scott advisor.

“There is irony here, that President Obama was criticized for deficit spending when Republicans have been in charge here for all these years,” said Senate Democratic Leader Nan Rich, R-Weston. “When you wonder how did this happen in Florida, you’ve just got to look at the people in charge.”

Sen. Joe Negron, R-Stuart, vice-chairman of the Senate’s budget committee, said he agrees with Scott that state spending is not a driver of the economy. He said the incoming governor will find Republican lawmakers eager to cut.

“Just as we’re calling for the federal government to live within its means, Florida has to, as well,” Negron said.

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  • by ANon Location: The Capitol on Dec 3, 2010 at 12:34 PM
    Memo to Scott: Rotsa Ruck. Memo to those who voted him in: Ruh-Rohhhhhhh.
  • by Dick Location: Thomasville on Dec 3, 2010 at 08:20 AM
    Is the huge federal deficit bad? Of course it is and should be ridiculed. Is Florida's deficit bad? Of course it is and should be ridiculed. Shouldn't both be controled? Does it really matter who states the obvious? Black or white, liberal or conservative, gentile or Jew, male or female, old or young? Each and everyone of these knows that spending is out of control and it is going to have to be controled.
  • by 100% for Rick Scott. on Dec 2, 2010 at 06:07 PM
    The manager that has the managment style where you blame the other guy is the manager you need to be weary of. Rick Scott does not do that. He is an excellent manager. He identifys and take full responsibility for all problems and moves forward to get them resolved. He does not do this blame game management style.
  • by 100% for Rick Scott on Dec 2, 2010 at 06:00 PM
    Groten, you mean all his special intrest buddies that paid for his election. Those buddies. News flash. He has no special intrest buddies. He used his own money.
  • by Anonymous on Dec 2, 2010 at 04:52 PM
    Posted by: James on Dec 2, 2010 at 04:52 PM You nailed it, on all counts, sir.
  • by James on Dec 2, 2010 at 01:52 PM
    This John Kennedy, with The News Service of Florida, definitely has a liberal agenda that he is not even hiding, and for WCTV to run his alleged news service through its readers’ stories is insulting. All of these attacks on Scott are so obvious. He has not even been inaugurated yet. Blaming “tax cuts” as the cause for steering away lawmakers from pay-as-you-go is plain out ignorant and liberal; oh that’s right, liberal and ignorant have the same meaning. Tax cuts, on every level, have always helped the economy; true, not government, but isn’t that a pity. Bureaucracies are hungry for more taxpayer monies, and most of you silly people who are fighting to pay more taxes are indeed fools. What is to be expected by a news agency like WCTV, in the North Florida area, a liberal Mecca (especially Leon County)? Leon County voters most adamantly voted against Scott. So WCTV thinks it is pleasuring the Leon County readers, right?
  • by groten Location: cairo on Dec 2, 2010 at 10:47 AM
    scott got rich by taxpayers money and now he can't wish away the deficit that his repub buddies created. you fla voters are sooo stupid.
  • by Disgusted on Dec 2, 2010 at 10:21 AM
    Meet the new boss. Same as the old boss
  • by Alligator Gar Location: Panacea on Dec 2, 2010 at 09:55 AM
    Scott didn't get the memo. There are no "career politicians" in Florida anymore. His buddy Phil Handy did away with those through "8 is enough." Geesh, he's only been in the state 7 years. He knows NOTHING about us.
  • by Jonathan Swift Location: Florida on Dec 2, 2010 at 09:45 AM
    Nice! Jeb and the Florida GOP cut taxes for the wealthy (the intangible tax is just one example), then borrow money which is financed with taxes from the rest of us. What miscreants! What fools the voters that support them are.
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