Tuesday, May 22, 2018

Economic growth continues slowly

TALLAHASSEE — Florida's economy continues to show signs of slow, steady growth as the state continues to pull out of the depths of the recession.

State economists on Friday drew up new forecasts for the coming year that project that the state's tax collections — one sign of Florida's economic health — will grow around 5 percent for the next two years.

But Amy Baker, the head of the state's Office of Economic and Demographic Research, cautioned that the economy could be harmed by outside factors, including the ongoing stalemate in Washington, D.C., over how to avoid looming tax hikes and budget cuts due to take effect in January.

She said there were already signs that the ongoing discussion of the "fiscal cliff" was beginning to have a "dampening" effect on the economy.

"We're not trying to guess what will happen in the future," Baker said. "We are just trying to recognize the little bit of concern in the economy we're seeing right now."

What the latest numbers do show, however, is that there should be less pressure on Gov. Rick Scott and the GOP-controlled Legislature to enact spending cuts in order to balance the state budget. Scott will rely on these estimates to draw up the budget recommendations he will unveil early next year.

Scott, in fact, could have a budget surplus of more than $800 million to work with, according to the latest estimates — although the money is primarily a one-time windfall.

The governor could have this surplus and still have enough money to pay for new school enrollment, increased costs in Medicaid, the safety-net health care program for the poor, and even make a payment to bolster the financial health of the state pension plan.

Florida's budget relies primarily on a variety of taxes, especially the state's 6 percent sales tax that itself rises and falls based on consumer spending.

The new forecast adopted on Friday projects that the state should take in nearly $25 billion in the coming year in its main budget account or an increase of about 5.3 percent. That amount is expected to grow to nearly $26 billion in the fiscal year leading up to Scott's re-election campaign or about 4.7 percent. The state's fiscal year runs from July 1 to June 30.

The state's overall budget is nearly $70 billion, but that's because it includes federal aid for such programs such as Medicaid, the safety-net health care program for the poor, and money that is spent on road-building and transportation.

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