FLORIDA — Facing a $3.3 billion projected revenue shortfall over the next two fiscal years, and with little help expected from the federal government, Florida lawmakers will soon consider slashing state spending. The contours of the cuts and the amount of pain they exact will depend in large measure on the economic impact of this winter's surge of coronavirus cases and deaths.
What You Need To Know
- Florida is facing a projected $3.3 billion revenue shortfall over the next two fiscal years
- Florida's tourism-dependent economy has taken a serious hit thanks to the COVID-19 pandemic
- The earlier revenue shortfall estimate was $5.4 billion
Florida's tourism-dependent economy suffered a budget-busting blow last spring, as the virus prompted theme parks and beaches to close just as the critical spring break season was beginning. Since then, however, sales tax revenues have posted a stronger than expected recovery. State economists this week revised their projection of the budget shortfall over the next two fiscal years downward, to $3.3 billion, from an earlier estimate of $5.4 billion.
Still, the prospect of trimming roughly $1.6 billion in spending during the upcoming legislative session is prompting a shared sense of foreboding in Tallahassee not experienced since the depths of the Great Recession more than a decade ago.
Addressing reporters after the legislature's post-election organization session, Senate President Wilton Simpson (R-Trilby) said a host of budget silos — including education funding — could be subject to cuts. He suggested spending on more discretionary items would be targeted first.
"We've built lots of big projects in the budgets, whether it was the M-CORES, whether it was the SB-10 that was south of the lake," Simpson said. "Those are very large recurring dollar items within our budget, and so, you have to ask yourself, can you afford that in this moment?"
There's also a possibility the rosier revenue forecast will worsen if the virus causes more unforeseen economic disruptions. While the state economist representing Gov. Ron DeSantis' office sees fewer downsides to the pandemic's scourge in 2021, his counterparts representing the legislature are taking a more risk-on view.
"It's a consensus conference," said Amy Baker, the legislature's chief economist. "We have to collectively weigh the risks that we think are in there. You don't think there is; I do think there is."