Florida will have nearly $400 million less to spend in this year's budget than predicted in October, economic forecasters said Tuesday, putting in further jeopardy Gov. Rick Scott's plans for $1 billion in tax cuts and a new $250 million Florida Enterprise Fund to attract businesses to the state.
Considering Florida's $80 billion budget, $400 million is hardly a disappointment of seismic proportions. Income for the state will still increase by $1.2 billion over the current budget year. But for a governor who is already fighting to win over lawmakers, the news means he might have to step up his salesmanship.
Leaning on revenue from the Seminole Compact, Scott wants to push on with his plans unchanged. Jackie Schutz, the governor's communications director, issued this statement on his behalf:
“Governor Scott remains confident in his $1 billion tax cut package, because while updated REC numbers show that national economic factors have led to a projected forecast of a minor reduction of $388.5 million, recent estimates also show that if the Legislature chooses to adopt the Seminole Compact the Governor signed, it would bring in $2.3 billion over eight years. We are pleased to also learn that we still have a significant increase in revenues of over $1 billion in fiscal year 2016-17. Additionally, most actual revenues end up higher than revenue estimates.”
Legislative leaders were more cautious, but remained positive and bullish.
Said Senate President Andy Gardiner, R-Orlando, "Today’s revenue estimate is less than our economists previously predicted, reflecting the recent turbulence in our national and global economies.
“While Florida is feeling these impacts, our economy is growing at a steady rate, the private sector is creating jobs at a pace that exceeds the rest of the nation, and our state revenues remain higher than this time last year. These factors give us reason to be optimistic; however, it is still too early to tell if the temporary slowdown reflected in the new estimate will prove to be correct or whether it is a signal of a long-term downward trend."
House Speaker Steve Crisafulli said, "The revenue estimating conference results remind us that we continue to be in recovery, but we are certainly still bouncing back from the unprecedented recession. Fortunately, we have instituted conservative budgeting principles year after year. We will be able to make adjustments to our spending plan which will come out in the next few weeks."
A drop in corporate income taxes is the most obvious reason for the revenue adjustment. Amy Baker, head of the Legislature's Office of Economic and Demographic Research, said Florida isn't alone in experiencing a softening of corporate profits. The whole nation is feeling it, she said -- a weak economy overseas has nations to putting the brakes on American exports.
"Today’s estimate shows how ripples in the global economy can quickly affect our state and communities," said Florida TaxWatch President and CEO Dominic M. Calabro. Our state’s economy remains strong, with growth in almost every sector, but it is critically important that we protect taxpayers’ money with a vigilant focus on government efficiency. I encourage all lawmakers to review the recommendations from the Government Efficiency Task Force and I applaud the Senate for taking a key step toward ensuring a solid review of government spending with SPB 7052."
Gardiner made it clear that the Senate wants to protect Florida's rainy day fund. "Our goal in drafting the Senate budget is to prioritize funding to care for the most vulnerable and other programmatic structural needs of our state," he said. "We are also working to strike a balance that reconciles our desire to enhance broad-based tax relief, economic development and other pro-growth policies with our responsibility to set aside ample reserves that allow our state to respond to the potential for continued instability in other economies.”
Reach Nancy Smith at nsmith@sunshinestatenews.com or at 228-282-2423. Twitter: @NancyLBSmith
