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Courts secure another loan to make it through the year

Senior Editor Regular News

Courts secure another loan to make it through the year

Senior Editor

Gov. Rick Scott has approved a $45.6 million loan requested by Chief Justice Charles Canady to keep the state’s courts operating through next March.

Chief Justice Charles Canady Canady made the request after recent projections by state economists showed that foreclosure filings — which finance much of the state courts’ activities — were lagging behind expectations, with the result that the courts would soon run short of money.

The request for the $45.6 million is beyond the $54 million loan made to the courts to begin the 2011-12 fiscal year. That loan was made in recognition of the con-tinued slump in foreclosure filings but with the expectation that a rebound in filings would not only end the shortfall but allow the courts to repay the $54 million loan.

Instead, the courts have had to ask for more money.

In making the initial loan request, Canady noted that the courts are not exceeding their approved budget, but the issue is purely a shortfall in expected revenues. He also said the Supreme Court has appointed, following a directive from the Legislature, a study group to work with court clerks and recommend funding alternatives.

That group, the Revenue Stabilization Workgroup, is working on recommendations that, among other things, seek to return the bulk of court and clerks funding to general revenue sources. A preliminary draft of that report — scheduled to be formally presented to the court for approval after this News went to press — notes the court system now generates more revenue than it keeps. The workgroup will suggest the funds the clerks collect go into a new Core Court System Clearing Trust Fund, that would then make an “initial distribution” to the state courts revenue and clerk of court trust funds to stabilize funding, with the rest paid quarterly into Florida’s general revenue and “other agency” trust funds.

Scott, in approving the loan, asked to get a copy of the group’s final recommendations, which are expected by November 1.

“The Executive Office of the Governor recognizes the cash flow challenges that the courts are facing and hereby approves a loan, not to exceed $45.6 million, from available trust fund balances within the State Treasury to the State Courts Revenue Trust Fund,” Scott said in his letter.

“The transfers should only be made as needed to cover cash deficiencies, and the loan must be repaid as soon as practical, but not later than June 30, 2012.”

The new loan is intended to give the Legislature, which begins its annual session in January, time to address the continuing problems with court funding.

Chief Justice Canady was pleased with Scott’s action.

“We are grateful to Gov. Scott and the Legislature for their approval of the loan and their recognition that the reliance on foreclosure filing fees is a defect in the state courts’ funding that urgently needs correction,” he said.

“We and the clerks of court are working on a proposal we hope to present in a few weeks to correct a problem that, twice in a year now, has led to the projected cash flow into the state courts falling far short of projections by state economists. Gov. Scott and legislative leadership will be the first to receive that proposal when it is finalized.”

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