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Gov. Scott expects more budget cuts as state revenue projections shrink

TALLAHASSEE — Gov. Rick Scott and the Florida Legislature face a $1.5 billion revenue shortfall, state economists said Tuesday, complicating a budget picture in which health care and education costs are expected to rise as much as $1 billion.

The new revenue forecast is $600 million lower than state economists projected in March for the 2011-12 budget and $968.3 million lower than predicted for 2012-13.

The culprit, said Amy Baker, director of the Legislature's Economic and Demographic Research, is a state economy that is "more anemic than originally anticipated."

The projections are not what lawmakers had in mind last session when they cut regulations, slashed spending and eliminated more than 4,000 state jobs to balance the $69 billion budget. Legislators slashed $4 billion from schools, employee benefits, environmental programs and health care on the promise that less state spending would do more to stabilize a faltering economy.

Lawmakers also turned away billions in federal transportation and health care money, and tried to boost the economy by including $70 million in tax incentives for the new Department of Economic Opportunity and $25 million for a three-day sales-tax holiday for back-to-school supplies in August.

But the tax breaks and attempts at austerity couldn't stop the decline in revenues in every area of state government as the pace of the housing and employment recovery "has significantly slowed," Baker said. The state will collect $643.9 million in additional revenues this year over 2010-11, she said. That's a 2.9 percent increase. Baker said the state economy grew, but it wasn't enough as Florida remained "in the throes of an abnormally slow recovery.''

Sales tax collections took the biggest hit, down $1 billion over previous projections for both budget years, economists said. The stalled real estate market resulted in lower documentary stamp taxes and intangibles taxes than projected, forcing economists to revise their projections down by $230 million for the two budget years.

Sales taxes from tourism and recreation performed as projected, Baker said, but it fell short of compensating for the slower housing market and the decline in consumer spending.

To complicate the budget forecast, state economists revealed last week that gas tax collections are down because people are driving more fuel efficient vehicles, and the tax on utilities — which the state uses to finance school construction projects from elementary schools to universities — will also be down.

It all means legislators will have less money to spend when they convene to write the 2012-13 budget, which begins July 1, during the regular session that starts in January.

The House budget committee last week said rising public school costs and Medicaid spending — coupled with the lower tax revenues — will mean a budget gap of as much as $2.2 billion.

Senate President Mike Haridopolos, R-Merritt Island, said lawmakers will resolve the deficit by cutting programs. "We're going to keep true to our word and we're not going to raise a tax or a fee on people,'' he said last week.

Scott told business leaders in Tallahassee Tuesday that his legislative agenda will continue his efforts to cut regulations and taxes as well as tightening requirements for those receiving unemployment benefits.

"We're going to have to go through the same thing of how you prioritize those dollars," Scott said Tuesday during a speech to Tallahassee's North East Business Association.

Times/Herald staff writer Michael C. Bender contributed to this report. Mary Ellen Klas can be reached at meklas@miamiherald.com

Gov. Scott expects more budget cuts as state revenue projections shrink 10/11/11 [Last modified: Tuesday, October 11, 2011 9:57pm]
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