TALLAHASSEE — State lawmakers should prepare to cover a $2 billion gap in next year's budget, Florida's chief economist said Thursday, citing local and global factors.
Economist Amy Baker told the Senate Budget Committee that Florida's recovery is being slowed by the European debt crisis, the likelihood of default by Greece and a lack of consumer confidence in America. Closer to home, Baker said, Medicaid and court costs are rising, and a gross receipts tax that pays for school and university construction is generating less money than projected.
"We're going to have our work cut out for us again in trying to make good decisions," said Sen. JD Alexander, R-Lake Wales, the budget committee's chairman, who last spring oversaw $4 billion in cuts to eliminate a previous shortfall.
Adding to the budget pressure is the Legislature's insistence on setting aside at least $1 billion in a reserve fund for emergencies.
A glimmer of hope in Baker's report is that economists forecast slow but steady improvement in state revenue growth in future years — 6 percent in 2013 and 2014 and 5 percent in 2015, based on the expectation that consumers who now live in Florida will start buying the cars, furniture and appliances that generate needed sales tax revenue.
"This growth is largely achievable if people just spend more," Baker said. "Our forecast is predicated on people starting to feel a little bit better and spending a little bit more."
Senate President Mike Haridopolos, R-Merritt Island, ruled out new revenue sources such as taxing online sales of books, clothing and other items by Florida residents, a proposal that business groups have advocated for years. The Florida Chamber of Commerce said Thursday that taxing online sales was one of its legislative priorities for 2012.
Despite the shaky fiscal outlook, various state agencies are asking for increases next year to meet specific needs. For example, the Department of Corrections, with an aging stock of decades-old prisons, wants $15 million for maintenance, repairs, electrical and environmental upgrades to its buildings, and $725,000 to replace aging soft body armor used by correctional officers.
And with weather conditions ripe for another dry and wildfire-prone summer, the Department of Agriculture and Consumer Services is seeking $7.2 million for new firefighting equipment. Officials say they will also need more money to combat an infestation of giant African land snails in South Florida.
Times/Herald staff writer Katie Sanders contributed to this report. Steve Bousquet can be reached at firstname.lastname@example.org or (850) 224-7263.