For the first time in years, state legislators arent looking down the barrel of a potential financial shortfall when they arrive in Tallahassee for the next session.
But even with the prospects of $70 million more in revenue next year than is expected to fuel the current years $70 billion budget, the fiscal outlook isnt all roses and rainbows.
Still, the gradual, slow-but-steady growth is better than at least the prior six years, state economists said.
Members of the Legislative Budget Commission were apprised Wednesday that after four years in which the gaps could be seen in numbers that included the word "billion," successive sessions of cutting fat have placed the state in line for surpluses of $70 million in the next fiscal year (2013-2014), $53 million in fiscal year 2014-2015 and $600 million in fiscal year 2015-2016.
But that is if nothing changes: the euro doesnt crash; the U.S. doesnt run off the fiscal cliff as 2013 begins; Florida isnt hit by a category 4 hurricane; or legislators see dollar signs and begin new undertakings.
Amy Baker, the states chief economist, cautioned legislators that while consumer confidence has grown from record lows last summer, the above issues and more are on the table right now that could create pitfalls in the states budget.
Wed say its definitely better than what theyve seen in the last few years; we have more confidence, its more predictable moving forward, but there are still really big downside risks --the big one being the fiscal cliff and how that plays out, Baker said.
Were very dependent on consumer expenditures in Florida because of our sales tax. So if consumers get rattled, upset, worried, pull back on spending, we can see a pretty quick impact on sales tax collections."
The state is seeing signs for improvement as housing starts have picked up andconsumer credit and auto loans are increasing. Still, credit concerns for housing remain, where even new home buyers have to have top credit scores and be able to put down 20 percent at closing.
For Florida, the things that will make the difference for us continue to be same things weve been looking at: hopefully, low home prices that begin to attract buyers and clear the inventory; long-run sustainable demand backed by continued population growth and household formation, Baker said.
Florida should surpass New York as the nations third most populated state prior to 2016, when the Sunshine State is expected to claim 20 million residents.
Growth is now pushing 1.2 percent a year, down from 3 percent a year that was seen prior to the housing bubble bust.
Senate President-elect Don Gaetz, R-Niceville, said the future of health care costs, particularly Medicaid, will continue to cast a pall over any budget projections.
Unless we can get Medicaid costs to a predictable level, and they havent done that yet --we always get cost overruns after economic estimates have been made --we will very likely find ourselves not in a plus, but in a negative position, Gaetz said.
Baker said the numbers will be adjusted in the fall when new Medicaid numbers are available.
Committee Chairman Sen. JD Alexander, R-Lake Wales, said prior to the meeting that despite the worst four budget years in over 50 years for the state of Florida, the outlook is better and the states credit rating has remained strong.
We got through it with reasonable decisions; things appear to be working, Alexander said.
He also questioned advocates who continue to push for additional money for schools and other social programs, saying accountability is just as vital as funding.
I dont think there is enough money in the state of Florida to do it. Look at Chicago, where youve got a union striking and theyre making $70,000 based salaries and turned down a 16 percent increase over four years, Alexander said. There are always advocates who say we should do more. I think weve done well to maintain our funding in our education system. Would we like to do more? Sure. And I think if the economy improves well be able to do that.
Senate Minority Leader Nan Rich, D-Sunrise, noted that the state has a waiting list of 65,000 children for child care, 22,000 elderly on waiting lists for care, and the state universities had $300 million cut from their budgets for the current year.
Basically, youre saying without other sources of revenue we wont have much flexibility to fix any other of those things, Rich said to Baker.
Reach Jim Turner at jturner@sunshinestatenews.com or at (772) 215-9889.
