CFO Patronis: We Must Prepare for State Revenue Impacts of COVID-19

TALLAHASSEE, Fla. – Today, Chief Financial Officer (CFO) Jimmy Patronis sent the following letter to Governor Ron DeSantis, Florida Senate President Bill Galvano, and Florida House Speaker Jose Oliva on the need to convene the Revenue Estimating Conference (REC) out of an abundance of caution to better understand the impacts COVID-19 will have on our states finances.
 
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March 20, 2020
 
The Honorable Ron DeSantis
Governor of Florida
PL 05, The Capitol
Tallahassee, FL 32399
 
Dear Governor DeSantis:
 
Following Sine Die of the Legislature yesterday, the FY 2020-2021 budget will now be submitted to the Governor for review and signature to be enacted into law. Because each of your offices has a representative on the Revenue Estimating Conference (REC) it is my belief that you should move to convene that body in order to assess the economic realities of the COVID-19 virus and associated response effort.  
 
The Governor, as Chief Budget Officer, must ensure that revenues collected will be sufficient to meet the appropriations and that no deficit occurs in any state fund. Working with the Governor, my office must also ensure that revenues collected will be sufficient to meet the appropriations. I believe considering the COVID-19 pandemic the REC should convene to ensure there is sufficient revenue to pay for fiscal year 2020-2021. We all share in a constitutional obligation to ensure the state can raise sufficient revenues to finance the appropriations prerogatives of the Legislature.
 
I applaud the Governor’s support of small businesses in these urgent times by suspending professional licensure renewal requirements, but the resulting delay in trust fund revenue is just one example of the economic impact this virus is having on our state finances, and we are still in the early stages of defeating COVID-19.
 
After serving in the House during the financial crisis, I am familiar with the difficult choices that must be made as a result of unexpected revenue shortfalls. The financial projections for our state have dramatically changed from what they were at the beginning of the FY 2021 budget making process. Our current year budget (2019-2020) is also likely to be affected by the mass shutdown and closures forced by COVID-19.
 
We are at war in many ways with an unseen enemy, and a time of war is a time of uncertainty. Our job is to be as conscientious as possible when spending Florida taxpayer money. This means the REC must work quickly to make new projections based on new information. The State Board of Administration (SBA) should weigh-in and make an assessment about Florida’s AAA credit rating as it could be affected by spending from the rainy-day fund or the assumption of more state debt – either of which could be an option for COVID-19 spending.
 
My office stands ready to assist you in these efforts, and it may be most efficient to form an informal working group with representatives from each of our respective offices to evaluate the REC and SBA data, as well as fiscal steps taken by other states. I believe that the REC and SBA’s effort to gather the most information possible about the new fiscal reality of COVID-19 will be essential to informing the Governor and the Legislature on next steps.
 
I appreciate all you do for the State of Florida, as strong leadership is needed now more than ever. I have every confidence that together, we will see the state through this crisis.
 
Sincerely,
Jimmy Patronis
Chief Financial Officer
 
cc: The Honorable Bill Galvano, President, The Florida Senate
      The Honorable Jose Oliva, Speaker, The Florida House of Representatives