By: Bill Kaczor
This appeared in tallahassee.com, see full story
Lawmakers got the bad financial news most were expecting Friday when state economists said they now expect general revenues to be down about $1 billion in the current budget year and nearly $2.4 billion in the next one compared to estimates made just four months ago.
That gloomy Friday-the-13th forecast will throw the current budget, which runs through June 30, into a $706 million deficit. Also for the fourth time in a row, overall general revenue is expected to be lower in the next budget year than it was in the previous one.
The Legislature will use the new estimates to draft the 2009-10 budget and modify the current $65.5 billion budget. General revenues — mostly sales tax — account for about a third of each budget, but lawmakers have little control over other money that makes up the rest of the budget.
It’s largely federal dollars for such purposes as Medicaid and trust fund collections that must be spent for specific purposes such as fuel taxes for transportation and utility taxes for school construction.
The forecast came as no surprise because general revenue collections since the last estimate in November already have fallen more than $200 million below that projection.
“As we anticipated, state government revenues continue to decline and these new estimates reflect that Florida’s economy continues to suffer,” said House Speaker Larry Cretul, R-Ocala. He said lawmakers already have been combing the budget to identify potential spending cuts and savings.
Florida is expecting about $13 billion in federal stimulus money spread over the current and next two budget years, and Gov. Charlie Crist has proposed pumping $3.2 billion of that into the current budget. It could be more then enough to wipe out the anticipated deficit depending on how it is used.
Crist also has included $4.7 billion in stimulus in his proposed $66.5 billion budget for 2009-10.
His proposal also has a $2 billion cushion, but that would still leave a deficit of almost $400 million with the new revenue estimate. If the stimulus is used to create a current year surplus, though, that excess could be carried over into the new budget.
The governor issued a brief statement again urging lawmakers to make full use of the stimulus money. He also urged them to approve an agreement with the Seminole Indians to pay the state millions in exchange for permission to add blackjack and other Las Vegas style games to tribal casinos.
Senate President Jeff Atwater, R-North Palm Beach, said the new estimate makes it “clear that the federal stimulus dollars will not solve Florida’s budget deficit” but added that lawmakers “will deploy the stimulus dollars where applicable and appropriate, particularly in the areas of Medicaid and education.”
Besides the general revenue shortfall, lawmakers also are looking at about a $1 billion reduction for the 2009-10 budget in local property taxes that are factored into the state’s school funding formula.
The new estimate is for $20.4 billion in general revenue this year — down from $24 billion last year — and $20 billion next year. The economists forecast increases to $21 billion in 2010-11, $23 billion in 2011-12 and $24.95 billion in 2013 event though they reduced each of those estimates by $3 billion.
The previous estimate was off because the economists did not foresee as big a reduction in consumer spending as actually occurred, particularly during the holiday season, and they had expected the national credit freeze to thaw by now, but it hasn’t, said Amy Baker, coordinator of the Legislature’s Office of Demographic and Economic Research.
