The state House is expected to unveil a preliminary budget of roughly $66 billion Wednesday that would be balanced partly through spending cuts and borrowing from state trust funds. Those funds could include a loan of as much as $600 million from the Lawton Chiles Endowment Fund, which was established in 1999 by the state legislature with a portion of the landmark tobacco settlement won in 1997 during Mr. Chiles's governorship. The fund's purpose is to support health care for poor children and seniors, smoking-cessation programs and biomedical research.
Gov. Charlie Crist proposed dipping into the fund as part of a plan to balance the budget that also calls for enacting a permanent 4% spending cut at state agencies and tapping $320 million in reserve cash, among other moves. Gov. Crist has publicly likened the Chiles fund to a rainy-day account and said the Chiles family has no authority to determine how it is used.
Lawton Chiles III, the 59-year-old son of the former governor, says the family objects to borrowing from the fund for a second consecutive year and setting no timetable for repayment. The family wants the fund used for its expressed purpose. To stop the state, he says he has assembled a team of lawyers that includes David Fonville of Tallahassee and Steve Yerrid of Tampa, who successfully represented the state against cigarette makers a decade ago. He says their strategy would be to challenge the legality of using fund assets for purposes not articulated in the law that created the fund.
"Fiscally, it's kind of dumb, kind of like doing a margin call when your stock is at the lowest point," Mr. Chiles said.
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