Article Courtesy of The Sun
Sentinel
By Joe Kollin
Published February 28, 2007
Money paid into
trust funds for specific purposes ranging from enforcing condo laws to
providing affordable housing would be diverted to routine government
expenses under terms of Gov. Charlie Crist's proposed $70 billion state
budget.
With the state's economy weakened and government revenue down, Crist has
proposed balancing his spending plan by using money from 39 trust funds
— accounts created by the state as trusts to be used for specific
purposes. The budget Crist submitted to the Legislature on Jan. 31 for the
year beginning July 1 would take $740 million from trust funds.
Condo leaders are strongly opposing Crist's proposal to raid the condo
trust fund. Most of the money came from condo unit owners.
"It shows
that embezzlement of association funds is not only taking place in our
condos," said Jan Bergemann, president of the Deland-based Cyber
Citizens for Justice. "Even the government participates."
This is the second time Crist has proposed using the trust funds to help
balance the state budget. State senators, who consider trust funds
untouchable, balked at a similar proposal in September and condo leaders
were especially forceful in their opposition. Crist never submitted that
proposal.
State Rep. Julio Robaina, R-Miami, chairman of the House Select Committee
on Condominium & Homeowner Association Governance, opposed the earlier
proposal and disagrees with Crist again on the new one. Since Jan. 26, his
seven-member committee has held public hearings throughout the state to
hear complaints about associations, determine the problems and recommend
new laws.
"I think it would be a real shame to [divert money in] a trust fund,
seeing all the problems we're hearing from people around the state,"
he said Wednesday. "Those dollars could be used to help them
out."
The Select Committee is scheduled to hold its final hearing in Tallahassee
on Monday and issue its report and recommendations that day, just in time
for the annual 60-day legislative session that begins Tuesday. The
Legislature must pass a budget within those 60 days.
Erin Isaac, Crist's communications director, would not comment on the
governor's proposal.
Legislators created the condo trust fund, administrated by the Department
of Business and Professional Regulation, to accumulate money from condo
owners and developers to pay for condo regulation without using money from
other taxpayers.
Money comes from the $4 annual fee paid by each of the 1.4 million condo
owners in the state. The 25,006 condo associations funnel the money to the
department. Money also comes from fees paid by developers as they create
condos and from the fines and civil penalties associations that violate
state law pay the department.
State officials use the money to investigate complaints, enforce condo
laws, educate owners and pay the state condo ombudsman.
According to the budget proposal, the condo fund on July 1 is expected to
contain $33.1 million. Crist's budget would take out $20 million for
general state spending. On July 1, 2009, as money continuously goes back
into the fund, it should have more than $20 million, his budget
anticipates.
Money from the trust funds that Crist wants to divert is in a category
generally known as "undesignated surplus" or "undesignated
balance." Because it isn't earmarked for any particular use in each
fund, spending it for other purposes can't hurt existing programs.
Every state government unit must decide to make up for reduced revenue by
dipping into the undesignated funds, raising taxes or cutting services.
Robaina said he questions how the state allowed the trust fund to
accumulate so much money that the governor could propose taking $20
million without hurting existing programs.
"The money left in that trust fund should have been used to provide
programs that could have lowered the number of complaints about
associations," he said.
Peter Cavanagh, the 45-year-old president of a condo association in the
Kings Point complex west of Delray Beach, also doesn't want the money
diverted. He cited the House Selection Committee hearings he has attended.
"I've heard all the problems and for the state now to decide to take
the money is a bad idea," he said. "It could be used for
education of board members and other purposes and shouldn't be
allowed."
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