State lawmakers return to work with many obstacles ahead

Oct 16, 2011

The following article was posted to the website on October 16, 2011:

State lawmakers resturn to work with many obstacles ahead

By Michael Peltier

Already complicated by election year politics, lawmakers return again this week in preparation for an election year special session now less than three months away.

Along with a once-a-decade redrawing of political boundaries, lawmakers will have to deal with yet another budget crunching exercise as the state’s economy, like that of the nation, continues to drift stuck in the economic doldrums that resemble a recession in all but name.

Slow consumer spending on big-ticket items and one of America’s worst housing markets obliged Florida economists last week to cut state revenue forecasts by $1.6 billion this fiscal year and next.

Meeting to tweak the revenue picture of the fourth most populous U.S. state ahead of a legislative budget-writing session in January, economists from the governor’s office and the legislature were expected to release a final forecast later.

Preliminary estimates showed revenue collections dropping about $600 million for the remainder of the current fiscal year that ends June 30, a drop that would reduce Florida’s general fund growth rate year-to-year by 2.5 percent from earlier estimates. .

For the coming fiscal year beginning next July 1, revenue will $968 billion less next year, a drop of 3.8 percent.

House staff members last week estimated the state will need $25.6 billion in general revenue collections to pay for ongoing programs, critical needs and high priority items, while putting $1.2 billion in reserves. Under the most conservative estimate, lawmakers could find the state nearly $2 billion in the hole.

Florida Governor a.inline_topic:hover { background-color: #EAEAEA; } Rick Scott earlier this year approved the current $69 billion spending plan, which also included federal funds and local required contributions.

The news was not completely unexpected but still lower than other estimates.

Economists for Wells Fargo had predicted that Florida’s economy would expand 2 percent in 2011 and 2.2 percent in 2012, a modest rate compared to the state’s boom in the early 2000s but one still likely to be faster than the overall national rate.

Retail, trade and other sectors beyond Florida’s mainstay leisure sector began adding jobs in recent months, the bank economists said, but Florida’s housing sector was unlikely to fully recover until 2015.

Speaking to business leaders in Tallahassee, Scott said the revised forecasts will make a difficult job even harder as Florida tries to again address budget shortfalls.

Earlier this year, lawmakers were forced to cut about $4 billion in spending to balance the current budget.

“We going to have to do the same thing (this year),” Scott said. “How do you manage those dollars when they are not growing dollars? It’s a lot easier to run a business when your revenues are growing every day.”

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