Florida’s tide of red ink recedes again — hitting nine-year low

Florida's debt level in 2016 at a nine-year low.
Florida’s debt level in 2016 at a nine-year low.

Florida’s debt dropped $1.6 billion last year to its lowest overall level since 2007, Gov. Rick Scott and the Cabinet were told Tuesday.

The state’s Bond Finance Division Director Ben Watkins pointed out the decline returned Florida to its more recent course of reducing the level of red ink, after a one-year increase spawned by major borrowing for road work on Interstate 4.

The $24.1 billion owed by Florida is its lowest level since 2007. Lawmakers were forced to include $2.1 billion in taxpayer money in the state’s $82 billion budget just to service the debt.

The decline has been helped by favorable interest rates, which have prodded the state to refinance some of what it owes over the past six years, saving about $2.5 billion, Watkins told the Cabinet.

About half of the state’s debt stems from bond financing to for school and university construction, with another 40 percent attributed to transportation work.

Stemming the tide of red ink comes even as Senate President Joe Negron, R-Stuart, has outlined plans for the state to bond $1.2 billion over 20 years to buy 60,000 acres to ease the impact of water discharges from Lake Okeechobee.

The land, mostly in western Palm Beach County, would be turned into a reservoir that would help cleanse farm-polluted water from the lake, which he said has “poisoned” the waterways of surrounding communities.

Scott and House Speaker Richard Corcoran, R-Land O’Lakes, haven’t said much about Negron’s initiative, which totals $2.4 billion, including an anticipated federal match.

Scott, though, has been intent on reducing Florida’s debt. Since he took office in 2011, debt has dropped $3.6 billion, from $27.7 billion.

Scott also effectively reversed a long period of borrowing that spiked when Gov. Jeb Bush took office in 1999 and state borrowing climbed about $10 billion over the next decade.

Gov. Scott embraces the ‘b’ word — borrowing

Gov. Scott reverses some on borrowing
Gov. Scott reverses some on borrowing

Gov. Rick Scott, who has touted cutting the state’s borrowing by $2.5 billion since taking office, reversed field Tuesday and joined with fellow Cabinet members in approving a $285 million bond issue for construction at schools, colleges and universities.

The approach was set in the state’s $82 billion budget by lawmakers during the legislative session which ended in March.

Unlike earlier years in his administration, when he threatened to veto any increase in red ink, Scott went along with the borrowing in signing the budget.

It’s the first time since 2011 that the state will issue new school construction bonds. Bond action since then has mostly focused on refinancing, which has saved the state money.


New study shows Florida’s pension, debt level among nation’s best

Florida's fiscal health looks sound in new report
Florida’s fiscal health looks sound in new report

Although Florida House Republicans annually call for overhauling the Florida Retirement System used by about 1 million active and retired public employees, a new study says it’s one of the most solvent funds in the nation.

Pew Charitable Trusts’ Fiscal 50 report released Tuesday shows that the low level of Florida’s debt and unfunded employee health and retirement costs place it in the top 10 of the country.

And in a measure debt-reducing Gov. Rick Scott will certainly embrace, Florida also is listed first nationally in terms of the percentage cut in money owed since 2003.

Pew found that Florida’s debt and unfunded costs combine to represent 7.2 percent of the 50-state personal income level, putting it ninth best. By comparison, Alaska is facing costs that total almost 53 percent of personal income — considered threatening to its financial health and topping the list as worst level in the nation.

House Republicans have steadily promoted efforts to revamp FRS, whose membership is mostly county school board employees and retirees — either by eliminating or restricting the state’s traditional pension plan and steering more workers into 401(k)-styled retirement plans.

But just as steadily, Senate Republicans have pushed back against the legislation over the years.


Florida’s debt level up $1.5 billion, reversing four-year trend

Florida's debt level ticked up this year, reversing four-year trend
Florida’s debt level ticked up this year, reversing four-year trend

Florida’s debt level spiked by $1.5 billion this year after declining the previous four years under Gov. Rick Scott.

The Republican governor has been focused heavily on stemming the state’s red ink. But recent road work on Interstate-4 in Central Florida helped boost the level of borrowing to $25.7 billion by June 30, Ben Watkins, director of the Division of Bond Finance told Scott and the Cabinet on Tuesday.

While helped by improved money management, Scott has slowed the pace of borrowing, particularly on school construction which represents 49 percent of state debt. Road-building accounts for most of the remaining IOUs.

This year’s $25.7 billion debt is down $2.5 billion from when Scott was elected, records show.

State lawmakers this year had to set aside almost $2 billion for payments on the debt. When Scott took office, it was $2.1 billion, double what it had been a decade earlier.

During last year’s governor’s race, Scott steadily pounded his Democratic opponent, Charlie Crist, for running up debt from 2007-11, when he served as the state’s Republican governor.

But Crist wasn’t alone in relying on red ink. The state’s debt tripled from 1992 to 2010, records show.

When Gov. Jeb Bush took office in 1999, he ushered in what is now a 15-year period of Republican leadership in Florida. State borrowing climbed about $10 billion the first decade.

Scott, though, has slowed that trend.