Another revenue-estimating conference, another likely budget gap. Depending on how the calculations are figured, the budget gap grow by another $1.3 billion for fiscal year 11-12. So the shortfall could be as high as $3.8 billion -- or perhaps even higher.
This morning, the state’s economists are issuing the general-revenue forecast that will underpin incoming Gov. Rick Scott’s budget. And it’s likely to be awash in red ink. Tax collections are growing. But they’re now forecast to grow more slowly than anticipated last August. And the tax collections aren’t growing as fast as likely expenditures for Medicaid, the biggest cost-driver in the budget, and schools, in which enrollment is increasing (thanks, partly, to 6,000 more students from earthquake-cholera-ravaged Haiti).
"We're definitely seeing year-over-year growth," said Amy Baker, the Legislature's chief economist. "But it's very, very slow."
By day’s end, the roundtable of economists from the Legislature’s Economic & Demographic Research, the Department of Revenue and the Executive Office of the Governor (which often issues the relatively rosiest forecasts) will reach a consensus on how much to shave from their estimates from the current and following budget year.
Taking the average of the three, the forecast tax collections will be down $589 million this year and down $686 million next year – Scott’s first budget year.
If those numbers hold, and if expenditures remain on pace, next year’s estimated budget gap of $3 billion could grow by $884.5 million more. If you use numbers from another financial outlook issued by state economists, a gap of $2.5 billion could increase by $1.3 billion. Obviously, if the starting gap is $3 billion, then the shortfall is over $4 billion.
Either way, it sure looks like the shortfall could be as high as $3.8 billion.
Note of caution: these are all estimates that will be subject to change. For instance, though Scott will use these numbers to propose his budget in February, the revenue-estimating conference will meet again and issue a new forecast before the Legislature proposes its own FY 11-12 budget in March.
Still, the trend is clear: Florida's economy is crawling along and sucking wind. Economic growth and therefore tax collections are anemic. So expect some major losers in the budget, most likely in Medicaid. Expect state worker pay cuts, layoffs or furloughs. Pension changes are pretty much a guarantee. The specifics, though, are uncertain. Scott won't say what he'll do, in part because the political newcomer doesn't yet know. One way or another, certainly by budget time, he'll explain how he'll trim $1 billion from school property taxes and begin eliminating corporate income taxes as he faces a budget gap.