Higher spending is a sign of consumer confidence in Florida!- Stefan
Posted: 6:52 p.m. Thursday, Aug. 9, 2012
Revenue Forecast Shows Florida Rebuilding
By John Kennedy
Palm Beach Post Capital Bureau
Florida’s economy is slowly putting on muscle, packing away increased tax collections which could keep the state from facing another troubled budget next spring, analysts said Thursday.
The legislature should have a relatively robust, $2.6 billion more revenue for the 2013-14 budget, the state’s Revenue Estimating Conference concluded.
The spending side of the state’s ledger is still unclear – with Medicaid costs and school enrollment numbers still climbing. But following five years of budget shortfalls, state economists acknowledged things are looking up.
“At least the economy is starting to behave as we expect it to behave,” said Amy Baker, coordinator of the legislature’s Office of Economic and Demographic Research. “It’s moving with some degree of steadiness over a long period.”
After cutting millions from the state budget when the recession hardened in 2007, lawmakers have dealt with shortfalls each of the past five years through program cuts and layoffs of thousands of workers across state and local governments.
The Legislature, however, has also sought to squirrel away dollars when they could – and completed the current year $69.9 billion budget by putting an additional $1 billion into reserves.
The four-member revenue conference, which includes representatives of the Legislature, Gov. Rick Scott’s office and the state Revenue Department, also have sought to avoid the wrenching impact of budget cuts by somewhat low-balling forecasts in recent months.
Those more modest predictions resulted in the 2011-12 budget year ending June 30 with the state banking $407.1 million more in tax collections than economists predicted at the beginning of the year.
That extra cash will be added to the $1 billion in tax collections already set aside, giving lawmakers a cushion when they begin crafting a spending plan next spring.
The size of that boost depends on many elements, including the direction of the economy and the still-unfolding cost of state services for next year.
But the current-year level of general revenue Thursday was predicted as climbing $1 billion, or 4.3 percent more than the year ending June 30. Next year’s growth forecast is $1.2 billion, or 5 percent above this year’s level.
These amounts didn’t change dramatically Thursday. But signs that the cash flow is steadying also is promising, analysts said.
“Underlying the forecast is the assumption that a recovery has been underway since the late spring of 2010, but the economy still has far to go to return to normal conditions,” the conference concluded in a written statement.
Indeed, this year’s general revenue total of $24.9 billion remains well below the state’s high-water mark reached during the real estate bubble. In 2006-07, lawmakers expected $31.7 billion to flow into the fund before the bottom fell out of the nation’s economy.
For now the news also likely won’t disrupt the campaign themes coursing through Florida this election season, centering on job creation and economic recovery.
Republican Mitt Romney, his party’s presumptive presidential nominee, has been airing television spots in Florida that condemn the state’s 8.6 percent unemployment rate and record level of foreclosures – which he pins on President Obama.
Scott, the Republican governor, has praised Florida’s jobless rate, even though it tops the national average. Although the GOP message at times sounds discordant, Scott said the state would be better off with a Republican partner in the White House.
Obama TV spots have cast Florida, the nation’s biggest toss-up state in the presidential contest, as benefiting from his policies when it comes to climbing out of the recession.
The state’s general revenue comes mostly from tax collections and makes up almost half of the Florida budget, with the remainder derived from federal dollars, state trust funds and reserves.
General revenue, in turn, is largely fueled by Florida’s 6 percent statewide sales tax, whose collections have been rebounding slightly with the improving economy, analysts said.