'Perfect storm' revenue picture for Florida
Forecasters sharpening the state's revenues are spending the day looking under fiscal rocks and finding little money. It's anticipated that the Revenue Estimating Conference will update the estimate to reflect a loss in this fiscal year alone of up to $4-billion compared to a projection from March.
All across the economic spectrum, the effects of the recession are hammering Florida's bottom line. Sales tax collections are sliding downward because people are buying fewer cars and fewer tourists are coming to Florida. Fewer cars on the road means fewer license tags and fewer insurance premium taxes - two other important revenue sources for the state.
As corporate profits tank, corporate income taxes will continue to sink. They are projected to drop by another 6 percent next year, or $220-million. "The worst is definitely ahead of us," said Amy Baker, the chair of the Revenue Estimating Conference.
People are even smoking less than expected, which is why cigarette sales taxes, already the 46th lowest rate among states, are also in decline. The state is being forced to liquidate its long-term securities to improve short-term cash flow, which means it is selling off those assets before they mature - creating what Jerry Bowman, a revenue analyst in the governor's office, called "the perfect storm with our investment portfolio."
The updated revenue forecast will become the driving force for the next round of decisions by Gov. Charlie Crist and the Republican-led Legislature, which likely cannot avoid a special session to put yet another large patch over the bleeding budget.
One leading Democrat, Sen. Dan Gelber, D-Miami Beach, isn't waiting for the final number. He again called for a special session Friday. "In rough waters, we can't expect government to run on auto-pilot," Gelber said on his blog.
Crist and legislators face a narrowing set of options: They can borrow more money from two fast-dwindling reserve funds, sweep unspent cash from single-purpose accounts known as trust funds, or make permanent the existing 4-percent hold-backs on all state agencies. They may also consider two last-resort options: make deeper cuts to the state budget or lay off state workers.