Fla economist: $1-bil budget hole next year, $2.3-bil by 2011-12
Florida chief economist Amy Baker is friendly and quick with a smile, but her messages tend to be real downers.
So it went Thursday, when Baker told the Legislative Budget Commission that the coming year's budget faces a potential gap of $923 million, and by 2011-12 when federal stimulus dollars dry up, the hole could be as big as $2.3 billion.
Credit a still-weak economy and real estate market, combined with increasing needs in areas like health care and other state-funded services. Baker used terms like "massive wealth destruction" to describe the affect of the recession and plummeting home values on Floridians and the state economy. She gave scary stats like the median price of a home going from $250,000 to $147,000. Oh, and she said to brace for more high unemployment numbers.
But fear not, the House Majority Office said in a release sent as soon as the meeting ended. Keep reading for that....And here's the report Baker delivered: Download Long Range Outlook- August 2009
This afternoon Amy Baker of the Legislature’s Office of Economic and Demographic Research (EDR) presented economic data to be included in the annual Long-Range Financial Outlook developed by the Legislative Budget Commission. The analysis should not come as a surprise- we face more fiscal challenges in the years ahead.
According to the consensus outlook, the 2010-2011 state budget is facing a potential gap of $923 million in the next year fiscal year. While last year’s gap was substantially larger, the gap in the coming year means that tough budget decisions must be made yet again.
Equally important is the impact of the coming stimulus flameout as those federal dollars begin to disappear over the next two years. For the 2011-2012 budget year, the budget gap could be $2.3 billion. This should not come as a surprise to us. In fact, we began planning for the impending stimulus flameout this year by reducing current spending and not using federal stimulus dollars for new government programs while planning for the future. However, this anticipated budget gap means that we continue to have our work cut out for us to balance our state budget and get our economy moving again.
It has been said before, but is worth repeating: we are not Congress. We cannot - and should not - spend more money than we have. We are not Sacramento; we are not Albany. Expanding the size of government and pushing the costs out onto future generations is not the solution. We must balance our state budget responsibly, make difficult decisions regarding spending priorities, and do what is best to make it easier, not harder, for our state to recover from the current economic conditions.
The Florida Legislature has maintained a balanced budget by reducing spending nearly $6 billion over the past two years. We have made tough decisions, and understanding the challenges we face we are prepared to make them again.
I have attached the EDR presentation to this message. Please take some time and consider the analysis. Our actions this year have reduced the previous budget gap, and continuing on our path of fiscal responsibility will help us meet our obligation to Floridians to provide for a responsibly balanced budget for their future.
Florida House of Representatives