Economists predict little change in revenue trends -- $2 billion hole
$2 billion -- no less and, thankfully, no more.
That's the projected budget shortfall facing legislators as they embark on crafting the 2012-13 state budget over the next 60 days, according to soon-to-be-released forecasts from state economists.
Officials who make up the stat'es Revenue Estimating Conference met for more than three hours this morning and concluded that the revenue projections they predicted last fall won't change much -- essentially giving legislators a signal to start sharpening their budget pencils. Senate President Mike Haridopolos had suggested that if the forecast seemed uncertain, legislators could adjourn early and come back to complete the budget later in the year using more updated numbers. Lawmakers must finish the budget each year by June 30.
The revenue projections will leave a shortage of about $1 billion under last year's $69.1 billion budget. If legislators put aside $1 billion in reserves that they kept aside last year, the shortfall rises to $2 billion.
Economists will return at 4 p.m. to finalize their projections but initial forecasts look as though state revenues will go up $48 million for the current budget year and a drop of $25.7 million for next year, marginal shifts in the multi-billion dollar budget.
"You don't hardly get any closer to the current estimate than that," said Amy Baker, coordinator of the legislature's Division of Economic and Demographic Research.
If there is a negative event in the next few months, it could shift the forecast, she said, but could see no reason why these numbers won't hold long enough for legislators to finish their budget on schedule by the end of session March 9.
"At this point, I don't know of a reason that would cause us to say check back with us in a few months,"
Baker said that since the fall, when economists were worried about the Euro Zone and the prospect of a second recession, it appears that a crisis may have been diverted, she said, but "the risk is still there.''
The second risk is that growth of personal income in Florida, which dropped in the last quarter for the first time since 2009, will continue to decline. Personal income is based on wages and growth and with the state's high unemployment rate, Baker said, Florida's personal income levels now rank 46th in the nation.
"There's still the downside risk that the Euro Zone could continue to worsen,'' Baker said. "We're going to watch the next personal income data to see if that improves."
Baker said the retailer had good returns over the holiday, spurring higher sales tax revenues than projected, "but there is a very large concern there will be a payback from Christmas,'' she said. "It was people taking advantage of the deep discounts...but that was more of a bubble in the process than a new trend."