There are two stories running in the background of the COVID-19 pandemic that too few people are taking note of, or even recognize: the critical role of sound budgeting in good times in order to create reserves for a time of crisis. It sounds boring and less important than other things government can spend money on. It’s not.
The federal government seems incapable of restraining its voracious appetite to spend far beyond its means, saddling our children and our children’s children with paying off profligate spending. But now, when it actually needs to deficit spend during the time of a true health and economic crisis, the feds start off in a $23 trillion hole, spending massive amounts just on interest from past overspending. That’s because of irresponsible budgeting and spending for decades.
But the opposite is true in Florida, which must pass a balanced budget annually according to its constitution. The state does this each year, even without an income tax, by restraining spending. It is as simple and as hard as that. Everyone, it seems, wants state money for something, just as they do federal money. There is no shortage of well intentioned, usually expensive, programs and projects.
Congress pretty much says “yes” to everything and spends recklessly without regard to consequences. Florida leaders make the tough decisions concerning which priorities get funded and which do not. That’s real leadership and a recognition of the reality that budget deficits burden future generations.
While Florida cannot run an operating deficit in its annual budget, it can issue notes for capital projects. Thanks to the long-term fiscal discipline of the Florida legislature and governors, all three national credit rating agencies gave Florida their highest credit rating of AAA in 2018. That saves taxpayers more money through lower interest rates on our remaining debt. This is the kind of discipline that ensures Florida doesn’t have to raise sales taxes.
It’s no mystery how Florida’s Republican legislature accomplished this astonishing task. They slashed unnecessary and burdensome rules and regulations, cut taxes and lowered professional license fees that unnecessarily added costs to doing business. In doing this, they saved Florida’s families and businesses billions of dollars in the last ten years alone, money that was recirculated in the economy to generate more growth, and more tax revenue without increasing taxes.
Notably, this was all accomplished while the state made record investments in Florida’s transportation infrastructure and increased total funding for education at all levels.
Not everybody liked all of the decisions made by the Legislature and Governor to get to this point, but that is the price of strong leadership. And it is paying dividends. Controlled spending has a lot of positive outcomes — from more money in people’s pockets, to not immorally burdening future generations, to making it cheaper to borrow when needed.
But what it means today is that Florida has a large surplus to draw on to fight the pandemic. While the federal government just plunges deeper and deeper into red ink, Florida has the money in the bank, so to speak, and can simply withdraw it — not burdening future taxpayers, because we acted responsibly with their money all along.
This year’s budget included more than $60 million for COVID-19 responses, $1.7 billion for hurricane relief and increases in several other areas. But it also has nearly $4 billion in reserves.
Contrast that to the disgraceful federal government’s shameful over-spending for decades and $23 trillion in debt. There are no reserves. It is now forced to further mortgage our children’s and grandchildren’s futures to pay because the feds refuse to stop spending trillions of dollars more than they brought in. Every year, the Federal government spends a trillion dollars more than it collects. That is not responsible or sustainable.
Fiscally conservative budgeting allows us to weather storms, whether they be hurricanes, recessions or pandemics — and not kick the can down the road.
Florida State Rep. Tommy Gregory, R-Sarasota, represents House District 73 covering parts of Sarasota County and Manatee County.