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Brighter budget outlook for state — for now — economist says

TALLAHASSEE — Florida's chief economist gave legislators a brighter view of the state's economic outlook Wednesday, but it came with a catch: Sales tax collections took an alarming drop again last month.

Economist Amy Baker, briefing lawmakers on Florida's overall financial condition, cited slightly positive trends in home sales, population growth and employment.

Coupled with the Legislature's decision this spring to cut spending on year-to-year programs by more than $4 billion, Baker said the state's bottom line has stabilized somewhat and Florida has a projected cash balance of $1.24 billion for next year, enough to meet its critical needs, mainly in health care and education.

"We no longer face a shortfall," said Rep. Denise Grimsley, R-Sebring, the chairwoman of the House Appropriations Committee and the Legislative Budget Commission that heard Baker's presentation. "But I caution you not to get too comfortable."

Baker said statewide sales tax receipts took a fresh hit in August and came in more than $40 million below projections at a time when consumer confidence was jolted by Wall Street's negative reaction to the debt ceiling crisis in Washington.

That followed a July in which sales tax collections were about $28 million below projections.

The state's main generator of tax revenue is the 6 percent statewide sales tax applied to large consumer goods such as cars, furniture and appliances, as well as restaurant and hotel bills.

As consumers become worried about their economic future, they're less likely to buy big-ticket items.

"Perceptions just plummeted," said Baker, director of the state's Office of Economic and Demographic Research.

If sales tax collections don't bounce back quickly, it could force lawmakers to consider another round of spending reductions and make it less likely that they will be able to reduce taxes in an election year in 2012.

"I hope it's a short-term problem," said J.D. Alexander, R-Lake Wales, the Senate's chief budget writer. "We're going to have to be careful about what we do."

Also Wednesday, the budget panel approved a request by Gov. Rick Scott's administration to accept a $3.4 million grant from President Barack Obama's administration to pay for home visits for people in at-risk communities.

The grant is linked to the state's request for up to $100 million in federal Race to the Top funds for early learning programs.

Two Republican senators, Don Gaetz of Niceville and Joe Negron of Stuart, strongly criticized the home-visit grant and voted not to accept it.

Negron said he opposed government employees visiting people in their homes and "not providing a tangible service. It's overly intrusive."

Democrats, led by Sen. Nan Rich, D-Weston, said the money is urgently needed to protect children who are at risk of abuse.

Steve Bousquet can be reached at or (850) 224-7263.

Brighter budget outlook for state — for now — economist says 09/07/11 [Last modified: Wednesday, September 7, 2011 10:48pm]
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