School district tax rates key in Florida’s budget forecast, state economist says

Chief legislative economist Amy Baker tells lawmakers "required local effort" is one of the most critical financial decisions they will make this year.
Published Jan. 8, 2019|Updated Jan. 8, 2019

For three years, the Florida Legislature has told school districts to reduce their property tax rates so their revenue would remain flat as assessed values rose.

They made one exception, allowing districts to benefit from the value of new construction.

As the state's economy matures into a 10th year of continuous growth — one of the longest sustained such periods — lawmakers might want to reconsider their position.

Chief state economist Amy Baker told the House Appropriations Committee on Tuesday that Florida's three-year financial outlook is looking as if new revenue growth will not be sufficient to cover anticipated budget growth in critical areas without legislative intervention.

Baker suggested that the Legislature's decision on how to generate state and local dollars for K-12 education will represent perhaps the key action on balancing spending.

"How you go with that decision is going to really color what we view in terms of there being a structural imbalance and how quick we will see it as a state," Baker said toward the end of her 40-minute overview for the panel, in which she reminded lawmakers that Florida is not recession-proof.

In fact, Baker stressed, Florida's current good times — including strong tourism and tax collections — are both fluid and volatile. Expenses associated with Hurricane Michael are rising, and already higher than those connected to Hurricane Irma, for instance.

She advised taking a cautious approach to spending any projected surplus, while also settling on policy for covering recurring K-12 needs.

"[F]unding for this policy area is a significant component of Florida's overall General Revenue budget," Baker stated in her slide presentation. "Large swings between Outlooks may continue until a consistent policy on the funding split between state and local dollars is in place."

Committee members did not ask any questions relating to the required local effort. The House has been the chamber to insist upon lowering school districts' tax rates, with the Senate and Gov. Rick Scott disagreeing in principle last year but ultimately acquiescing.

The debate has included concerns over forcing local taxpayers to cover the lion's share of the education budget, despite the state constitution calling that expense a paramount duty of the state. In 1997-98, the state covered 59 percent of the K-12 budget, but its share declined since.

Several school boards have already begun asking their delegations to change the approach for the next fiscal year, saying that having the money to pay for operations including employee raises is critical. Nearly two dozen school districts held successful local tax referenda in 2018 to generate money they said the state would not provide.

Related coverage: Pasco School Board to consider asking lawmakers to leave property tax rates alone