TALLAHASSEE — Florida's looming budget shortfall has been cut in half by state analysts, who credit federal stimulus dollars, years of spending cuts and Indian gambling money as helping to forge a brighter picture — but still leaving the state in a $2.5 billion hole.
A year ago, state forecasters projected a $5.5 billion gap for 2011-12, as the remnants of the recession and a stone-cold housing market looked certain to dig deeply into state tax revenue. But in a revamped forecast slated to be reviewed Tuesday by the Legislative Budget Commission, analysts now say the tide of red ink may stop at the $2.5 billion mark.
"This is what we see at this moment," said Amy Baker, coordinator of the Legislature's Office of Economic and Demographic Research, among several panels making the latest forecast. "The revenue side is slightly better. And the spending has leveled off."
Baker conceded, however, that the revised projection does not take into account the impact of the Gulf of Mexico oil spill. The effect of the tourist slump in the Panhandle this past summer — coupled with increased spending on efforts to clean up the oil — is still proving too difficult to gauge, she said.
"It's a big caveat in the forecast," Baker said. "We'll know more in coming months."
While the expected budget hole has diminished, lawmakers from both parties agreed that the debate over how to fill it remains largely unchanged, as the fall campaigns gather strength.
The Legislature's ruling Republicans already have set the stage for another round of belt tightening — and could draw strength from the economists' crediting reduced state spending as helping to produce the improved forecast.
"It's more pleasant to hear that things are getting better," said Sen. Don Gaetz, R-Nicevillle, who chairs the Senate's Select Committee on Florida's Economy. "But I think you have to credit the Republican majority for cutting recurring spending so we don't find ourselves hurtling toward the precipice."
But Gaetz said he was wary of the suddenly improved forecast, especially since the state's troubled housing market has shown only feeble signs of life and Medicaid costs are on track to top $20 billion next year, demanding an additional $1.4 billion in taxpayer dollars, according to analysts.
Gaetz said the forecast, while based on extensive data, "is a highly sophisticated Ouija board."
Democrats, who have pushed for closing some corporate-tax exemptions and enforcement of stricter Internet sales taxes, also said the revised shortfall eases pressure — but only slightly.
"We're not facing as big a deficit, but it's still a big one," said Rep. Ron Saunders of Key West, designated as the incoming House Democratic leader. "And the federal stimulus money is going away. A lot also is going to depend on who is governor."