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Florida $15 Million School Bond Vote Delayed in Scott Review

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Sept. 21 (Bloomberg) -- Florida’s cabinet delayed voting on a $15 million bond sale for school buildings under Republican Governor Rick Scott’s increased scrutiny of spending.

Scott, 58, asked a cabinet meeting in Tallahassee yesterday to defer consideration of the sale pending “more information on how the new debt is going to be used.” The debt, proposed by the Division of Bond Finance, was meant for construction in local school districts and the Florida college system.

The first-term governor, who promised increased government accountability in his campaign, vetoed almost $165 million of school-building bonds authorized by the Legislature when he signed the fiscal 2012 budget in May.

“This is not a common occurrence,” Ben Watkins, director of bond sales, said in an e-mail referring to the cabinet’s action. “But rather a reflection of the increased scrutiny of and justification for bond-financed facilities.”

The $15 million of bonds would have been repaid mostly from motor-vehicle license fees. They would also have had the state’s full faith and credit backing. Watkins said he was unsure when the cabinet would reconsider the sale.

Scott wants to know more about how school officials determine their capital needs, and the approval process, before he gives his go-ahead for debt to be issued, said Lane Wright, a spokesman.

“Governor Scott is asking everybody to be accountable, especially when it comes to issuing new debt,” Wright said in a telephone interview.

Four-Member Cabinet

The four-member cabinet authorizes bonds issued by the state on behalf of local school boards. Its members include Scott, Attorney General Pam Bondi, Chief Financial Officer Jeff Atwater and Agriculture Commissioner Adam Putnam, all Republicans elected in November.

The panel has been more active assessing bond sales than previously, Watkins said.

Other examples of involvement “are less visible but have to do with the questions that are asked and the information needed to evaluate requested authorizations,” he said.

Standard & Poor’s, which gives Florida its highest credit rating, revised its outlook on July 12 to stable from negative. It cited an expectation the state’s debt burden “should remain manageable and should not increase significantly based on current bond issuance.”

State debt decreased to $28.1 billion at the end of fiscal 2011 on June 30 from $28.2 billion the year before, Watkins said at the cabinet meeting.

To contact the reporter on this story: Simone Baribeau in Miami at sbaribeau@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.

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