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State economists: Revenue forecast steady, as is recovery
The funding available for next year’s state budget is expected to grow by almost $2.6 billion, according to a new estimate issued Thursday, though how much wiggle room that gives lawmakers in crafting a budget during the next legislative session remains unclear, reports Brandon Larrabee of the News Service of Florida.
Forecasters left an earlier estimate for taxes in the 2013-14 fiscal year essentially unchanged Thursday, shaving just $5.3 million off the total. But they warned that the economic recovery was likely to remain sluggish for an extended period of time, and that the ongoing crisis in the Eurozone and a series of federal tax increases and spending cuts set to take effect in January still posed dangers.
The state actually turned about a $407.1 million surplus in the fiscal year that ended June 30, the economists said, while adding that much of that appears to come from one-time boons in certain income sources and not the beginning of a stronger phase of the recovery.
“In addition, the national and Florida economic outlooks are moderately weaker for the 2013-14 and 2014-15 fiscal years, with downside risks in the near term,” a statement from the conference said. “Taking both factors under consideration, the Revenue Estimating Conference made only modest adjustments to a variety of tax sources, and these changes largely offset each other.”
Overall, the modest reductions still point to a belief that the recovery will slog around with modest progress.
“Originally, we had thought there might be some escalation in the recovery as we’ve moved out, and now we see it more slow and steady,” said Amy Baker, the coordinator of the Legislature’s Bureau of Economic and Demographic Research.
The surplus will roll forward, as will the $1 billion in reserves set aside in the current year’s budget. If lawmakers aren’t forced to tap those amounts, they would then combine with $1.2 billion in expected new revenues to give lawmakers more to work with.
The growth in revenue amounts to about a 5 percent bump from this year to next.
In reality, the budget picture won’t be completely known until at least early September, when the state’s long-range economic outlook is released. That report will take into account a series of taxing and spending decisions that are likely when lawmakers return to Tallahassee.
Lawmakers also have made a habit of setting aside $1 billion in reserves before deciding how much to spend, even before factors like growth for Medicaid and changes in school enrollment are taken into account.
Still, the first estimate since January of how much the state would pull in from taxes seemed to indicate that conditions might be stabilizing.
“The good news about the fact that the forecast ended up in almost exactly the same place means that at least the economy is starting to behave as we expect it to behave, and moves with some degree of steadiness over that long period,” said Baker.