Florida's economy climbs back, just in time for budget season
A steadily improving Florida economy means that lawmakers will have a bit more revenue in this year’s budget.
Chief state economist Amy Baker said Wednesday that the state’s $75 billion budget will have about $150 million more in general revenue, thanks to more consumer spending. That estimate doesn’t vary greatly from the ones made last year, meaning Florida’s economy has stabilized and is not experiencing the wild swings of the housing boom years and the subsequent collapse.
“It is very good news that the economy is behaving in some way that’s predictable and that we can forecast well,” Baker said.
While most sources of revenue were upgraded from last year, Baker lowered her estimate for revenue derived from revenue, such as documentary stamp tax and the intangibles tax. Those sources were lowered because of rising interest rates.
“A lot of it is refinancing, as rates climb back up, opportunities to refinance are limited,” she said. “People are largely positioned as best as they can be right now.”
Good news for state coffers: At the height of the recession, about half of all Florida mortgages were “under water”, or worth more than what the house was currently valued. Now only about 20 percent are.
But unlike years past where that might have meant people would have felt like they could have spent more, memories of the last few years will be hard to shake, Baker said.
“It’s going to take a long time for people to put behind them the Great Recession,” she said. “They’re feeling better, and ready to spend, but they’re cautious and trying to keep their bills paid down.”
The estimates are crucial for lawmakers, who base the budget that finances state government from July 1 to June 30, 2015 on these projections.
Baker said that overall, she estimates that the budget should have about a $1.2 billion surplus, which is about $200 million more than this year.
When told about Baker’s general revenue estimate, Florida House Speaker Will Weatherford said it’ll be mostly spent to cut taxes.
“It’s going to allow us to continue to look for ways to reduce the tax burden on citizens of the state and invest in things like education and hopefully have a very productive session.”
Weatherford isn’t waiting long to mull over Baker’s numbers.
He said by the end of this week (Read: Thursday) he’ll announce the totals that his appropriation chairs will help decide on how to spend.
On March 21, the Appropriations Committee will make the proposed House budget available online. All amendments to the budget must be filed by March 25. On April 3, the House votes on the budget and sends it to the Senate, where the real funs begins.