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Florida economic outlook getting dimmer

TALLAHASSEE — Florida's economic outlook is getting worse due to the double whammy of the national recession on top of the state's housing slump, state economists said Monday.

They made another downward shift in their economic outlook for the state. That's only going to make a bad budget situation worse for Florida lawmakers, who begin their annual 60-day session today.

It now looks like the national recession is going to last through the end of this summer, a quarter longer than previously forecast, said Amy Baker, coordinator of the Legislature's Office of Economic and Demographic Research.

"We're pretty much flat for a year after that before we see some normal growth rates coming back" in Florida, Baker said. "We definitely benefited more from the upside of the housing boom, so we had a bigger correction to make than the rest of the nation."

Before Florida could make that correction, it got hit by the national recession.

In November, the economists predicted a gap of at least $3.8 billion for the next budget year, which begins July 1, just to keep existing programs going and pay for other "musts," including Medicaid, public schools and prisons.

As a result of the new economic forecast and continuing revenue shortfalls that gap could grow to more than $5 billion, Baker said.

Economists won't revise that forecast, though, until they do another revenue estimate on March 13. Lawmakers then will use those figures to write next year's budget.

Gov. Charlie Crist had to rely on the November estimate for his proposed $66.5 billion budget that's about $1 billion more than current year spending. The governor relied heavily on federal stimulus money, fee increases and expanded Seminole Indian casino gambling to balance his proposed budget.

Department of Revenue economist Frank Williams said the stimulus money would only partly offset sharply falling state and local tax revenues.

"The stimulus package helps, but it's just a Band-Aid," Williams said.

Florida economic outlook getting dimmer 03/02/09 [Last modified: Monday, March 2, 2009 9:27pm]
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