TALLAHASSEE, Fla. — Florida’s economic recovery over the past few years probably won’t be enough to prevent Gov. Rick Scott and top Republican legislators from being forced to make tough decisions to meet some of their recent spending promises.
A new annual forecast put together by state economists and legislative staff says that in the coming year, Florida is expected to bring in just enough money to meet its needs.
The three-year outlook shows the state will have a surplus of only $7.5 million during the fiscal year that starts in July 2017. More importantly, Florida will have a substantial budget gap of $1.3 billion in Scott’s final year in office if nothing is done.
That sets up the likelihood of yet another budget showdown in the Legislature during the annual session that starts next March.
Scott has made it clear that he wants to continue to push for additional tax cuts. Incoming Senate President Joe Negron has his own ambitious plans to boost spending on state universities and acquire land south of Lake Okeechobee as a part of a push to stop recent toxic algae blooms.
“The good news is that they have the benefit of time,” said Amy Baker, coordinator for the Office of Economic and Demographic Research. “If they are not really careful in the first year, they are going to develop really big problems. … It’s going to be really challenging.”
Florida’s overall budget this year, which includes state tax dollars and federal aid, is nearly $82.3 billion. The state’s main source of money — a 6 percent sales tax — is continuing to grow after the Great Recession.
But the forecast drawn up by Baker and other economists concludes that increased public school enrollment, rising costs in Medicaid and additional spending on state worker benefits will cut into the amount of money that could be spent on tax cuts or new programs. The forecast also assumes that legislators will set aside at least $1 billion in reserves.
Part of the problem is that a series of tax cuts pushed into place primarily at the urging of Scott has resulted in less money coming into state accounts.
Negron, who called the latest forecast a “snapshot in time” that will be revised before the 2017 session, acknowledged legislators may have cut spending in some parts of the budget to find money for some of his priorities.
“I think we will have to make difficult choices between competing priorities,” said Negron, an attorney and Republican from Stuart.
One of those priorities will likely be Scott’s continued insistence to cut taxes further. He has constantly pushed for tax cuts during most of his five years in office.
“Gov. Scott looks forward to working with the Legislature to keep cutting taxes and making college more affordable for students,” said Jackie Schutz, a spokeswoman for Scott, when asked about the new forecast.
Negron said the Legislature will likely agree to more tax cuts next year, but added, “The main question is ‘What is the appropriate level of those tax reductions?'”
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