"Rick Scott has paid down our debt by about $2 billion. Charlie Crist’s debt went up about $5 billion."
Lenny Curry on Sunday, April 14th, 2013 in an interview with Central Florida News 13
RPOF chair Lenny Curry says Rick Scott cut state debt by $2 billion, Charlie Crist increased it by $5 billion
Gov. Rick Scott and his allies are eager to point out the "stark contrast" in Scott’s record with that of his predecessor and possible 2014 competitor, Charlie Crist.
Republican Party of Florida chairman Lenny Curry compared the state debt under each governor in an April 15 interview with our Orlando TV partner, Central Florida News 13. Host Ybeth Bruzual asked Curry how Scott looks against Crist, who polls show would have a sizeable lead over Scott if he enters the governor’s race.
"Look, they both have a record," Curry said. "Rick Scott has a record right now of close to 300,000 jobs created on his watch. Rick Scott has paid down our debt in Florida by about $2 billion. Our unemployment rate is now in a three/four year low. Under Charlie Crist, we lost over 800,000 jobs. Unemployment went from about 3 percent to over 11 percent. Charlie Crist's debt went up about $5 billion. The records couldn't be clearer."
Those are Scott’s recent talking points almost verbatim. PolitiFact Florida looked at state debt under both governors and examined what role governors have over it in a January fact-check.
Like Scott, Curry makes a decent point about the debt’s rise and fall in recent years. But he’s not telling the whole story. Let’s review.
Counting the debt
There are different ways to count the debt, and there are different ways to assign responsibility for it.
We determined the amount of debt Florida accumulated during the Crist years from the archives of the Division of Bond Finance, which publishes an annual report on the debt picture. We used the most recent Debt Affordability Report to show the total outstanding debt over recent fiscal years.
2006: $23 billion
2007: $24.1 billion
2008: $24.3 billion
2009: $26.4 billion
2010: $28.2 billion
2011: $27.7 billion
2012: $26.2 billion
Curry’s math works if you compare the fiscal year ending in 2006 with the one ending in 2010 (+$5.2 billion), and then 2010 with the 2012 fiscal year (-$2 billion).
But some experts we consulted said the better way to compare debt between governors is by examining the budgets over which the governor actually had control to veto spending.
Crist was elected in 2006 and took office in January 2007. That means the first budget he signed -- which included projects in need of bond financing -- covered the 2008 fiscal year, which ended June 30, 2008. The last budget Crist signed was for the 2011 fiscal year, which ended six months into Scott’s tenure.
So it’s more accurate to assess the growth of the debt under Crist from FY 2008 to FY 2011. This method produces an increase of $3.4 billion in debt, which is still large but not as big as the $5 billion Curry claimed.
Now let’s look at Scott’s tenure. He took office in January 2011, so the first budget he signed covered the budget year running July 1, 2011, to June 30, 2012. Under this measure, Scott reduced the debt only $1.5 billion.
Still, no one denies the total debt fell sharply with Scott, who is famously debt-averse. It’s short of his $2 billion talking point now, but it probably won’t be when we get an analysis of debt from the 2012-13 budget, said Kurt Wenner, Florida TaxWatch vice president of tax research, in January.
"He’s only had one year that’s been reflected, but certainly I think we’ll find that last year was a relatively low bonding year as well," Wenner said.
What was going on?
Even during the worst of Florida’s recession, Florida borrowed money for capital projects while maintaining its credit ratings with various agencies.
"We’ve been very well managed financially even during the downturn," said Ben Watkins, executive director of the state’s Division of Bond Finance, in January. "We’re very conservative."
The sharp decline in debt is due to the state’s discontinued borrowing for acquiring conservation land and the decline of the state’s largest borrowing program, called Public Education Capital Outlay, or PECO, for public school, college and university construction projects. The decades-old program is paid for by a tax on electric, gas and telecommunications services, a source that has shriveled over recent years as Floridians conserve energy and ditch landline phones.
In 2012, there was no PECO borrowing because of a serious drop-off in collections from the tax. Higher ed advocates said the PECO shortfall signaled a "crisis in infrastructure funding" that would limit the state’s ability to educate college students. At the University of South Florida, for example, a new learning center has gone unfinished as it awaits more PECO money.
In his first year, Scott vetoed $474 million in bonds, including dozens of improvement and construction projects at state colleges and universities. Scott lowered debt issuance to $416 million, its lowest level since 1990 and significantly less than the $2 billion yearly average for the previous decade.
Conversely, the rapid increase in debt after 2002 was driven mostly by the 2002 class-size amendment added to the Constitution by Florida voters that year. It required the Legislature to reduce class sizes by adding more classrooms. It cost the state $2.5 billion to build more class space, which included $1.9 billion in lottery revenue bonds, said David Jacobson, a spokesman for Moody’s Investors Service. That program is essentially over, he said, which contributes to the debt falling.
As education commissioner, Crist said he supported the goal of reducing class size but was concerned with costs.
Curry is broadly correct: State debt increased under Crist and has decreased under Scott.
But the numbers he uses are not accurate if you consider the budget years over which Crist could have exerted any control. Moreover, some bonds Florida issued were to pay for programs in the works before Crist took over, and the Legislature shares at least some of the blame for putting it in the budget.
Finally, there was a spike in the debt after 2002 that was driven by a constitutional amendment to limit class sizes. Voters approved that measure, and the state government was required to put it into action.
Consistent with our previous rating, we rate Curry’s claim Half True.