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Florida's April tax collections $91.7-million below target

TALLAHASSEE — Florida leaders have slashed more than $4-billion in state spending this year alone. But Gov. Charlie Crist and lawmakers learned Wednesday that may not be enough.

State economists reported $91.7-million more vanished in April when tax collections failed to meet even a downsized estimate set from March.

About half of that amount, $49.6-million, was due to fewer sales tax collections, which are used to pay for the state's operations, including schools, universities, prisons and health care programs.

In the cruel math of a weak economy, various forces contributed to the shortfall: slow construction, dropping housing prices and falling corporate income tax collections.

The result is Florida will limp toward the next fiscal year with little wiggle room in its downsized $72-billion budget. Should the trend worsen in the remaining five weeks of the fiscal year, it's possible the state may tap, for the first time, an emergency bank account known as the Budget Stabilization Fund.

Set up in the wake of 1992's Hurricane Andrew, the fund was initially designed to be tapped after an emergency, such as a hurricane, that prompted the state to face a deficit. Under law, the fund must be replenished within five years.

But anticipating the latest dire economic news, legislators this spring agreed to make it easier for the governor to tap the fund in the short term. Rather than a full vote of the Legislature, Crist needs to get only the approval of a joint legislative panel to pay bills for the rest of this fiscal year.

But one key legislator, who is facing re-election this fall, said that won't be necessary before July.

Rep. Ray Sansom, R-Destin, the House budget-writer and likely speaker of the House in November, said a series of technical changes to the state's financial outlook "will avert a deficit between now and July 1," when a new $66.2-billion budget takes effect.

"The House and Senate are working closely with the Governor's Office to ensure we receive adequate revenues in May and June to fund the state's approved budget for (the current) fiscal year," Sansom said in a statement.

An independent expert who closely monitors Florida's budget and the economy agreed.

"It's dire, but I don't think it's panic time," said Kurt Wenner, senior analyst for Florida TaxWatch. "This may give some encouragement to the governor to veto some more things to avoid going into reserves."

State economist Amy Baker said the state's official outlook shows $322.5-million in the state's working capital fund, or checkbook balance, for the five weeks left in the fiscal year.

The April slide in tax collections, added to March's decline, brings the new total to $140.7-million less than had been anticipated, dropping the checkbook balance to $181.8-million.

But state economists plan a June 10 meeting to re-evaluate the state's bottom line, including reviewing fiscal impacts of dozens of new laws, the potential net positive effect of Crist's budget vetoes and updating the state's Medicaid budget.

"I would expect that the bottom line will still be positive," Baker wrote Wednesday in an

e-mail.

Florida's April tax collections $91.7-million below target 05/21/08 [Last modified: Tuesday, May 27, 2008 2:11pm]
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