Of the $115.5 million invested by venture capitalists in the first quarter of 2008 in Florida, just $6.5 million of it landed in the Tampa Bay area.

According to numbers released by PricewaterhouseCoopers, the National Venture Capital Association and Thomson Reuters, Lifestyle Family Fitness in St. Petersburg received the region’s largest investment, a $3.8 million later stage investment from Ballast Point Venture Partners, Quantum Capital Partners and an undisclosed investor.

Skyway Software Inc. in Tampa picked up $2 million in expansion capital from Armada Venture Group LLC, Imlay Investments and an undisclosed investor. Also in Tampa, Acclaris Inc. grabbed $750,000 in later stage investment from Derwent London plc and Updata Partners.

Lifestyle operates a fitness chain with nine locations in Florida. Skyway develops software and deployment for business. Acclaris develops business process services.

Florida’s investment market is down 29 percent from the first quarter of 2007 when $162 million was invested in 14 companies, representing an average investment of $11.6 million. The $115.5 million in the first quarter of 2008 was distributed among eight companies, marking an average investment of $14.4 million.

Nationwide, more than $7.1 billion was invested in 922 deals in the first quarter, the fifth highest since 2001.

“Venture capitalists still have large amounts of money in their coffers, therefore it’s no surprise to see a solid level of investing continue,” said Tracy Lefteroff, global managing partner of the venture capital practice at PricewaterhouseCoopers, in a release. “VCs have weathered numerous economic cycles and will continue to fund companies with innovative ideas and solid business models while they also stand behind their portfolio companies for the long term.”

Florida still trails the nation’s top five states that receive venture funding. California accounted for more than half of the nation’s total at $3.5 billion, or $8.5 million per deal. Massachusetts picked up $697.9 million in funding, representing nearly $7 million per deal.

New York had 51 deals worth $406.9 million, averaging just under $8 million per deal. Texas and Colorado rounded out the top five with $361.4 million and $297.7 million, respectively.

If you’re in business for yourself you know that profit margins can be razor thin; consequently you’re always looking for cost reduction ideas and how to increase profitability.

Instead of cutting the quality of the goods and services you offer your customers ‘ which could subject you to customer backlash ‘ reduce your expenses and slash your interest payments by considering a commercial mortgage refinance.

Regardless of whether you carry loan balances for revolving debt, capital improvements, research & development, payroll, etc., you sometimes need ready access to cash. In business, the difference between turning a profit or posting a loss can sometimes be a few pennies per item.

If you carry loan balances, a reduction in interest rates of as little as a single percentage point through a commercial mortgage refinance could mean an extra few thousand dollars to your bottom line each and every month.

You may have a great working relationship with your local banker. Maybe you’re friends or you play golf together. Friendships and relationships are great, but if that friendship causes your profitability to fall or your business to suffer, it’s time to look to a knowledgeable mortgage broker who can help put your business back on course. Here are just a few of the benefits to using a commercial mortgage refinance:

LOCK IN A LOW FIXED INTEREST RATE - When you signed on the dotted line for your original business loan, it may have made perfect sense to have an adjustable interest rate because rates were pretty consistently falling. Now, rates are all over the map.

Forrest Gump said “Life is like a box of chocolates. You never know what you’re gonna get…” You can’t afford for your interest rates to fluctuate that wildly. If your rates are as fickle as the good will of your employees, it’s time to lock into a lower fixed rate by refinancing your commercial loans. Doing this will give you proven savings and performance you can count on.

REDUCE YOUR PAYMENTS - There aren’t too many expense categories your business has that won’t cost you money in the long run. You can cut your payroll, but in so doing you run the risk of alienating customers by reducing the level of customer service they receive, which could potentially come back to haunt you ‘ especially if your main competitor has better customer service.

By refinancing your current debt, the savings goes into your pocket and you can decide whether to allocate it to another business expenditure or to apply it to a richly-deserved vacation.

GIVE YOURSELF BETTER OPTIONS - Market conditions can change at the drop of a hat. At one time it may have made perfect sense to have a repayment term of 10 years on your commercial loan. If conditions have changed ‘ or your goals have ‘ you may need or want to change your repayment term to five years or 15 years. By refinancing, you can get the term that takes your business where you need it to go.

COMBINE MULTIPLE LOANS - If you have multiple commercial loans with varying interest rates, due dates, and maturity dates, you may feel as if you’re in the business of making loan payments. If you want to cut down on administrative tasks, you can refinance multiple loans or lines of credit into a single loan, with a single due date, that can same you time and ‘ more importantly ‘ money.

Going into business for yourself is easy, but knowing how to increase profitability despite increasingly treacherous market conditions, competitive factors, etc., can help put your mind at ease.

If it was as simple as slapping a sign on a building, everyone would be running a successful business. You need to implement effective cost reduction strategies and have the intuition to know when to hold ‘em, know when to fold ‘em…and know when it’s time to use a commercial mortgage refinance.

Darrin Roseborsky is a Refinance Specialist with OMAC Mortgages, seminar speaker and president of the Roseborsky Group and HomeRefinanceCoach.com. Darrin shows people how to MAXIMIZE their equity PROPERLY and how to choose options that make the MOST SENSE for their situation! An example of exactly how this works, is at: http://www.homerefinancecoach.com

Developers are reporting strong interest in commercial properties from investors in England, Ireland and Scotland.

Despite a growing focus on Asia, U.S. real estate has climbed to the top of the global property market among foreign investors - and by a wide margin.

New York City and Washington are the top two global cities for foreign investors’ real estate dollars, according to the results of the 16th annual survey by the Association of Foreign Investors in Real Estate (AFIRE), but experts say Florida is also seeing its fair share of European investment.

“The ascension of New York and Washington, D.C., as the two top global cities - with London tied for second place - represents a very strong showing for U.S. real estate,” said AFIRE Chairman Karin Shewer, who is also principal at Real Estate Capital Partners, a U.S. real estate investment advisor headquartered in New York City. “It is the only time since the global city category was added to our survey that U.S. cities have taken first and second spots.”

The foreign investment interest in commercial real estate - and residential real estate as well - started rising last year. Now, some are pointing to an all-out European spending frenzy that is expected to continue in 2008 thanks, in part, to a stable long-term U.S. market, declining property prices and a strong pound and euro.

Adrian Pennie, associate director of the Lloyd’s TSB Offshore Banking Miami office, credits both the strengthened pound and the crunch of the subprime mortgage market in the U.S. for the so-called European spending frenzy trend.

“In the UK, we hear quite emotional phrases about the U.S. market, like ‘property crisis’ and ‘credit crunch,’” Pennie said. “We have seen a great many U.S. banks and other lenders close their doors to foreign nationals. That has created another economy for people who have the finances and are able to invest with British pounds.”

Though China is gaining momentum, the U.S. is undeniably a European investment hotspot. On average, AFIRE survey respondents report that slightly more than 50% of their real estate planned acquisitions in 2008 will be allocated to the U.S. While that percentage remains roughly the same as 2007, the actual dollar amount is expected to increase by 16%. In all, global spending on real estate is expected to total $1.692 billion this year.

Garrett Kenny, president of Feltrim Developments in Davenport, Fla., won’t go so far as to say Europeans are stampeding through his doors, but he does see more Irish investors interested in Florida commercial real estate.

In fact, Kenny just closed on a 1.5-acre parcel of land on US 27, the future site of a 48,000sf office building. Feltrim received a $200,000 investment from an Irish investor on the deal. Kenny also cited another Irish investor who offered $500,000 to purchase a hotel site on US 27. Of course, Kenny admitted, he has affinity with Irish investors since he is an Irish developer.

“The weak dollar is attractive, however the Irish invest in euros and want to be repaid in euros, so we have to take a read on the currency situation,” Kenny explained. “The good aspect of using European investors is they appear to be more patient than their American counterparts. My Irish investors are in deals for four and five years.”

Josh Regan, co-founder and the managing partner at New Your City-based Madison Realty Capital, a private commercial lender providing senior-secured bridge loans, has seen increased interest from European institutional investors. MRC has $600 million in capital under management, and a large part of its investor base is in Europe.

“While Europeans were a little more cautious for a period, they are starting to dip into the New York and Florida markets more aggressively,” Regan said. “There is continued interest in distressed properties in particular. Europeans are basically paying half price compared to U.S. investors.”

While the common sense answer to what’s driving European investments in U.S. commercial real estate is “a weak U.S. dollar,” 85% of survey AFIRE respondents said recent fluctuations in the dollar have not prompted them to increase their U.S. allocation. The interest, rather, is driven by U.S. property’s strong stability and appreciation characteristics, survey respondents insist.

The percentage of AFIRE respondents saying it was “very difficult” to find attractive U.S. real estate fell to 22.8% from 37.5% in 2006. This represents the smallest percentage expressing this sentiment since 2003. In fact, for the first time since 2004, a measurable number of investors declared investing in the U.S. to be “somewhat easy.” And for the first time in years “distressed assets” are mentioned in the survey as a new strategic focus, as Regan mentioned.

The question is, how long will it last? Regan said it does depend, in part, on the strength of the dollar. But it also depends on the lack of liquidity in the U.S. market, of which European investors are taking full advantage.

“It could be a year. It could be two years. European investors are serving as a form of liquidity where liquidity is absent,” Regan said. “Some perceive, for example, that the Florida market had much more room to go in terms of decreased values. Others believe now is the turning point and some are willing to enter the market.”

In the past few months, homebuilding stocks have made some very optimistic moves upward, and a look at the Dow Jones Index of U.S. Home Builders [$DJUSHB] shows that ever since the beginning of 2008, this industry has been on an uptrend. Read the rest of this entry »

NEW YORK (AP) – March 28, 2008 – Thanks to the weakened dollar, the U.S. has leapfrogged France, Britain and other European countries as a cheaper place to do business.

A new study released Thursday by the auditing and consulting firm KPMG shows that the U.S. moved up on the list of places around the world that are the most cost-efficient. Researchers compared 136 cities in 10 countries in North America, Europe and Asia, but did not include fast-growing China.

Mark MacDonald, the global director of KPMG Competitive Alternatives, said the survey authors found the U.S. to be more cost competitive than they’d ever seen because of the plunging dollar.

In 2006, the U.S. lagged behind four other G7 countries. This year, though, the U.S. surpassed Britain, the Netherlands, Italy and France, leaving only Canada as being more cost-effective among the major industrial nations.

“Now the cost of business is considerably higher in these countries due largely to the depreciation of the U.S. dollar,” MacDonald said in a statement.

Mexico, which is new to the study, was cheapest overall. The study is done every two years.

Among the larger cities, the cheapest cities in which to operate were Puebla, Guadalajara and Monterrey, all in Mexico. In the U.S., the cheapest places were Atlanta, Tampa (Florida), and the Dallas-Fort Worth area.

The San Francisco Bay Area – which includes Silicon Valley and San Jose – was the most expensive in the U.S., edging out New York for that dubious distinction. London, Frankfurt and Manchester, England, were all more expensive than San Francisco.

Paris was slightly less expensive than New York.

The study measured competitiveness using labor costs, taxes, real estate and utilities, as well as non-monetary factors. It included Australia, Canada, France, Germany, Italy, Japan, Mexico, the Netherlands, Britain and all 50 states in the U.S. Those were all compared against a benchmark developed by taking the average cost of doing business in U.S. locations.

©Copyright 2008 The Associated Press, Vinnee Tong (AP Business Writer). All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Housing starts fell 0.6% in February and permits for new construction plunged 7.8% to the lowest level in 16 years. Read the rest of this entry »

The city of Sarasota is considered to be one of the most vibrant mid-sized cities in the state of Florida.

According to a survey by Money Magazine, the city ranks among the nation’s 15 most desirable areas to live, as the county enjoys a prime location on the West Coast of Florida, which is about 60 miles south of Tampa and is a mere hours away from Orlando’s Disney World.

The city’s 36 miles of coast line are home to the world’s finest, pristine whitest-sand beaches. The city is also home to a number of barrier islands, called Keys, which offer both wonderful real estate options, as well as excellent areas for swimming, water sports, and other leisure activities.

Property Options In Siesta Key Are Wonderful

One of the city’s famous keys is Siesta Key. This area offers one of the best vacation and second home property options here. Many housing and investment observers see living in Siesta Key as a truly good deal, as the area offers upscale waterfront homes, condo units, and upscale apartment developments.

For businessmen, retirees and families seeking wonderful vacation homes, the place offers a wonderful array of investment choices, wherein your family can live in a comfortable beach atmosphere and have the privilege of using many water sports and leisure facilities.

The Key is famous for its offering of upscale, elegant condominium developments, and the most favored units here are the ones that are located near the beach. Prospective owners would surely enjoy living in close proximity the area’s fine white sand beaches, and most developments offer a wide array of amenities, and the units are offered in varying prices.

Tips Before investing In Sarasota Properties

For investors, the abundance of real estate options in this city would surely make your heads turn, and sometimes will make your thoughts spin in deciding which ones to choose.

Before investing in a wtaer front home, apartment or condo unit, it would be better to first ask for advice from local property brokers, local housing agency officials, or agents of Multiple Listing Services (MLS) sites. The city has many property brokers who could assist you in finding suitable investment options, and can also assist you in evaluating each offer, as well as help you in crafting the best possible financing options for you real estate investment.

Siesta Key is a lovely 8-mile long barrier island located off the coast of the city. The place is connected to mainland Sarasota by two bridges, which makes it very convenient for residents to go to town and run some errands, or do some shopping in the city’s fashionable shopping districts.

The beaches in this Key are actually rated as one of the most attractive and beautiful beaches in the world. And the area also offers tourists and residents alike with wonderful facilities for just about every type of sporting or leisure activity such as bating, swimming, sailing, fishing, jet skiing, dolphin tours, and sunset cruises. The Key is also home to many condo developments, and they outnumber the single family homes and dominate the beach area.

A storefront is a business that has visibility from the street. Storefront properties are generally leased by those selling items to the public. Some storefronts are used for restaurants or even business offices. Leasing a storefront can bring the commercial real estate investor good, steady income.

In many cases, a commercial real estate investor will look for storefronts that need construction improvement. In other cases, old homes in “downtown” areas of different communities are being made into storefronts. Whether you are improving an existing storefront or turning a or other property into a storefront, it is best to have a qualified renter prior to purchasing the storefront property.

It will be your responsibility, when leasing a storefront, to make sure that the property complies with all local ordinances. This will relate specifically to advertising, lighting and signs. If the storefront is a solitary structure, you will also have to insure that the driveway and parking areas are cleared for customers.

Storefront businesses are popular in all parts of the country, especially in cities. Businesses that sell retail prefer leasing a storefront as it gives them more visibility for the public. Storefront windows can exhibit the goods in the store to their advantage. Storefront windows can also exhibit signs and have lettering on the windows, allowing a business drive by advertising.

One way to get a storefront is to purchase property in part of town that is changing from residential to business zoning. This happens in many areas where they are trying to make an historic area a shopping area in town. Old homes are converted from residential buildings to commercial real estate store fronts. A commercial real estate investor who wants to make a profit leasing a storefront can do well by purchasing such a property and converting.

To convert an old home into a storefront business you will first have to apply for a zoning change. If most of the other property is being zoned for business use, you should have no problem as long as the municipality approves your proposed usage of the property.

Prior to investing in commercial real estate, especially if you are endeavoring to engage in leasing a storefront, get a title search of the property and learn the covenants, restrictions and conditions that pertain to the property. These can range from all stores have to have a green roof to no restaurants that sell tacos. You have to make sure that you know if your business will be prohibited by any existing covenants or restrictions recorded on the property.

Leasing a storefront can be an ideal way to earn a profit when investing in commercial real estate. Because storefronts are usually easy to lease to businesses because of their visibility, they are rarely vacant when in prospering areas. As is the case with all commercial real estate investments, location has everything to do with the success of the business. Make sure your storefront is in a good location and has a steady traffic flow in order to make this commercial real estate investment work for you.

WASHINGTON – March 13, 2008 – Commercial real estate market fundamentals are fairly stable, although investment is waning following a record year in 2007, according to the latest Commercial Real Estate Outlook of the National Association of Realtors® (NAR).

NAR Chief Economist Lawrence Yun says the commercial real estate market is holding essentially even. “We’re seeing no significant changes in vacancy rates or rent growth, so the fundamentals in commercial real estate still seem to be respectable,” he says. “Under normal circumstances, near-full occupancy coupled with positive rent growth would be of strong interest to investors, but we’re not seeing that. The credit crunch has filtered into the commercial real estate market.”

Patricia Nooney of St. Louis, chair of the Realtors® Commercial Alliance Committee, said the investment cycle appears to be turning. “It looks like investors are taking a wait-and-see attitude,” she says. “Even with fairly stable fundamentals and capital available from institutional investors, it appears investor confidence has declined, and some private investors have had problems obtaining financing. Commercial real estate investment set a new record in 2007, but now that we’re in a period of economic uncertainty, transaction volume is likely to decline.”

Investment in commercial real estate in 2007 was $427.2 billion, up 39.2 percent from the previous record of $306.8 billion in 2006; that total does not include transactions valued at less than $5 million or investments in the hospitality sector, based on analysis of data from Real Capital Analytics. NAR projects the investment dollar volume this year could drop by 30 to 40 percent, comparable to 2006 levels.

The NAR forecast in four major commercial sectors analyzes quarterly data for various tracked metro areas. The sectors are the office, industrial, retail and multifamily markets. Torto Wheaton Research and Real Capital Analytics provided historic metro data.

Office market

There is a lag factor in the current office market to backfill space by tenants who moved into newly constructed space. At the same time, concerns about the overall economy are causing some tenants to put expansion or relocation plans on hold. These present a challenge to timely and cost-effectively lease space in older office buildings.

Since the level of new supply will be greater this year, office vacancies are expected to rise to 13.3 percent in the fourth quarter from 12.5 percent in the last quarter of 2007. Annual rent growth in the office sector is forecast at 3.5 percent in 2008, following an 8.0 percent gain last year.

Estimates for the first quarter show areas with the lowest office vacancies include New York City; Honolulu; Long Island, N.Y.; and San Francisco, all with vacancy rates of 9.4 percent or less.

Net absorption of office space in 57 markets tracked, which includes the leasing of new space coming on the market as well as space in existing properties, should total 38.5 million square feet in 2008, down from 57.3 million last year.

Office building transaction volume in 2007 totaled a record $211.0 billion, compared with $133.5 billion for 2006. Equity funds accounted for 40 percent of office investment last year. Foreign investors purchased a record $17.7 billion in office buildings last year.

Industrial market

Industrial activity remains strong in port and distribution hubs, with relative weakness around many manufacturing centers. International trade continues to play a pivotal role in industrial real estate.

Vacancy rates in the industrial sector will probably average 9.6 percent in the fourth quarter of 2008, up from 9.4 percent in the same period last year. Annual rent growth is projected at 3.3 percent by the fourth quarter, down from 3.6 percent at the end of 2007.

The areas with the lowest industrial vacancies include Los Angeles; San Francisco; Tucson, Ariz.; Salt Lake City; Orange County, Calif.; and Portland, Ore., all with vacancy rates of 6.1 percent or less. Los Angeles is expected to remain a landlord’s market for the next four to five years.

Net absorption of industrial space in 58 markets tracked is likely to total 134.7 million square feet in 2008, up from 120.2 million last year. Industrial transaction volume in 2007 was a record $46.0 billion, compared with $38.9 billion in 2006.

Retail market

The supply of new retail space is finally being held in check, although secondary markets might be growing because new space often follows population growth. As secondary and tertiary market populations continue to grow, it will become necessary to track those markets in addition to monitoring older retail centers.

Vacancy rates in the retail sector are expected to decline to 8.8 percent in the fourth quarter from 9.2 percent in the fourth quarter of 2007. Average retail rent is forecast to grow by 1.4 percent in 2008, compared with a 3.2 percent rise in 2006.

Retail markets with the lowest vacancies include Orange County, Calif.; San Francisco; San Jose, Calif.; Washington, D.C.; Las Vegas; Honolulu; and Los Angeles, all with vacancy rates of 5.9 percent or less.

Net absorption of retail space in 53 tracked markets is forecast at 24.8 million square feet this year, up from 11.1 million in 2007. Retail transaction volume in 2007 totaled a record $71.6 billion, up from $46.9 billion in 2006. REITs accounted for a quarter of retail transaction volume last year.

Multifamily market

The apartment rental market—multifamily housing—is attracting risk-averse institutional investors. Of the record $98.6 billion spent in this sector last year, 40 percent of acquisitions were from institutional investors such as pension funds and life insurance companies. Private investors were equally active, accounting for another 40 percent of transactions.

Many potential first-time homebuyers continue to rent, placing downward pressure on vacancy rates and upward pressure on rents. The number of new multifamily units remains relatively high, due in part to the conversion of condo projects into rental buildings, notably in the Washington, D.C., area and South Florida.

Multifamily vacancy rates should average 4.8 percent in the fourth quarter, down from 5.1 percent in the fourth quarter of 2007. Average rent is seen to rise 5.3 percent in 2008, up from a 3.1 percent increase in 2007. Multifamily net absorption is estimated at 245,800 units in 59 tracked metro areas in 2008, up from 234,400 last year.

The current national vacancy rate is 4.7 percent, below the 5.0 percent level, which is considered landlord’s market. The areas with the lowest apartment vacancies include Northern New Jersey, San Jose, Miami, Salt Lake City and San Diego, all with vacancy rates of 2.9 percent or less.

© 2008 FLORIDA ASSOCIATION OF REALTORS

TALLAHASSEE, Fla. – March 12, 2008 – Florida is likely to take in about $3 billion less in tax collections this fiscal year and next than previously expected, foreshadowing a brutal session in budget-chopping during the coming weeks.

High energy costs, a failing housing market, a weak credit market and other dark economic forces are combining to drive down general revenue, said state analysts who broke the bad news late Tuesday.

That means lawmakers will face a shortfall in 2008-2009 of somewhere between $3.1 billion and $3.2 billion in general revenue needed just to maintain the current level of state services, said Ray Sansom, chairman of the House Policy and Budget Council.

That assumes, he said, that Gov. Charlie Crist approves the $512 million package of cuts for the current fiscal year that lawmakers negotiated last week and are poised to adopt. If those cuts to education, health care, the courts and other areas take effect, lawmakers will have enough money in reserve to cover expenses without having to slice again into the 2007-2008 budget.

If those reductions do not take effect, “we would violate the Constitution because we would be in a deficit … by the time the fiscal year is over,” said Sansom, R-Destin. “That’s how critical that vote is.”

Tuesday was the fourth time the state’s economic analysts in the executive and legislative branches have revised their forecasts for the current year. Though predictions of plummeting revenue spurred lawmakers last fall to trim more than $1 billion from the budget, analysts have continued to predict worsening shortfalls.

While economic growth is expected to improve in late 2008-2009, said Amy Baker, director of the state Office of Economic and Demographic Research, “revenue collections are not anticipated to exceed the fiscal year 2005-2006 level until fiscal year 2010-2011.”

Tuesday afternoon, House Speaker Marco Rubio characterized Florida’s situation as “an economic crisis” not a “budget crisis.”

“These budgetary numbers that you are seeing today are a reflection of an economy that’s suffering, not a government that’s suffering,” Rubio told reporters. “This is a symptom of a larger disease, which is a national economic downturn which is disproportionately affecting Florida.”

Rubio said he was wrong last week when he warned lawmakers on the opening day of session that “Floridians would wake to the news that we have $4 billion less than we thought we would have, just a year ago.” Turns out, he said, “it’s $4.5 billion less.”

Corporate taxes scrutinized

Florida’s freefalling revenue has lawmakers in both parties pushing strategies for shoring up the budget. But the philosophical divides between them more or less guarantee little bipartisan agreement on a solution.

Reminiscent of Democrats in Congress pushing to sunset President George W. Bush’s tax breaks, Democrats in Tallahassee want to end sales tax exemptions and close what they call loopholes in the corporate tax system.

House Minority Leader Dan Gelber, D-Miami Beach, wants to prevent multistate companies from sheltering the profits they make in Florida in tax haven states like Delaware, where there is no corporate income tax. Doing so, Gelber says, would net Florida $400 million a year.

“We’ve got a serious deficit right now that isn’t going to be solved by simply saying we have to live within our means,” he said. “We’re dealing with, actually, health care and core public education issues.”

Gelber’s corporate tax plan will get a hearing in the House, Rubio said, but panned the general notion of increasing the tax burden on businesses.

Florida government will have to prioritize spending, Crist said Tuesday. “We have to tighten our belt just like Florida families do every day.”

Tap Reserves, Crist Says

But he continued Tuesday to urge lawmakers to tap into state reserves in order to avoid painful cuts, a proposal that many Democrats also support. Florida’s reserves include an emergency “budget stabilization fund” of $1.3 billion, which lawmakers would have to pay back within five years if they tapped into it.

Sansom and Rubio said tapping the state’s reserves would be irresponsible given the predicted duration of the economic downturn.

Every time one-time dollars are spent on recurring programs, Sansom said, “It just increases the reductions you have to make the next year, or the next year, or the next year.”

Rubio was more blunt. Spending reserves “is politically expedient; it’s an easy way out of this session,” he said. “It sets up the Legislature and the state of Florida for horrifying consequences as early as next year.”

Senate President Ken Pruitt released a statement calling Florida’s revenue drop-off “a very serious situation” but warned that “we must not take financial shortcuts in order to avoid the political heat that budget reductions will bring.

“We are going to need everyone to pull together to get through these difficult times,” he said. “Florida’s economy has been robust, and I believe once we weather this correction period, we will see those prosperous days again.”

Copyright © 2008 Tampa Tribune, Fla., Catherine Dolinski. Distributed by McClatchy-Tribune Information Services.