Florida Revenue May Grow by $2.6 Billion as Recovery Solidifies, Contradicting Romney
FlaglerLive | August 10, 2012
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.
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.
Meanwhile, as a new Mitt Romney ad gloomily lays out the sad state of Florida’s economy, Gov. Rick Scott said Tuesday he’ll keep talking up the good news of an improving economic picture, brushing aside questions about whether Republicans should have a more unified message.
“My job is to continue to talk about what we’re doing in Florida and the fact that we’re headed in the right direction, and that we’re going to continue to do well,” Scott told reporters on Tuesday.
That’s not the message of GOP presidential candidate Romney’s new Florida ad, which begins with President Obama talking about the need to improve the economy during an Orlando speech when he was running for president.
Then the sad music and dark, fuzzy tones take over the screen, as a litany of economic problems in the state are laid out.
“Under President Obama, 8.6 percent unemployment. Record foreclosures; 600,000 more Floridians in poverty,” the ad says. “He focused on Obamacare instead of jobs.”
What the ad doesn’t mention is that the state’s unemployment rate was 10.7 percent a year ago, 9.4 percent a month after President Obama took office, and when Gov. Scott started as governor it was just under 12 percent – meaning the rate has dropped in the time both Scott and Obama have been in office.
Scott made it clear that even as he prepares to speak at this month’s Republican National Convention where Romney will officially be nominated, he has no plans to change his optimistic tone.
“Look at (the fact that) our unemployment rate’s come down faster than any state but one,” Scott said . “Look at the jobs that have been generated in the last 18 months. Florida’s headed in the right direction.”
The RNC announced this week that Scott, as the host governor, will have a speaking role at the convention, though Scott said Tuesday he hasn’t been told any details. He won’t change his message, though.
“What I’m going to talk about is pretty much what I do every day, what I ran on,” Scott said. “It’s how do we get our state back to work. We’re doing the right things here.”
Scott did say what the Romney campaign – in more nuanced conversations than an ad allows for – says: that things would be better if Republicans were in charge of the White House and both houses of Congress.
“We need the federal government to do its part, we can’t have the highest corporate tax rates in the developed world,” Scott said. And he also acknowledged the state still has more to do – but skipped the opportunity to specifically pin that on the Obama Administration.
“We still have 793,000 people out of work, we’re not done yet,” Scott said. “I want to make sure people can get a job in Florida.”
On Thursday, Scott was again touting an economic success story in Florida as Port Canaveral will get a facelift earlier than expected following an announcement that the state will advance $24.4 million to help expand the port to accommodate newer, larger ships.
Scott and port officials unveiled the project which will expand the port by increasing the turnaround capacity needed for larger cruise ships and cargo vessels. To speed up construction, the state will advance the money and seek reimbursement from the federal government.
The investment enables Port Canaveral to jump-start the $52 million project from its previous 2017 start date.
While Scott has frequently talked about the need for private sector jobs – saying on several occasions that he isn’t interested in government creating jobs – in this case, he said it’s important because of a huge expected private sector ripple effect.
“Florida will step up to help create construction jobs in the near future and lasting permanent jobs, rather than take a chance on getting the federal government’s help,” Scott said in a statement.
A study completed for the Florida Ports Council estimates that the return on investment in port related projects is about seven-to one, with jobs created during construction but also retained after the work is complete
By advancing the funds on its own, the state will reduce the cost of the project by about $12 million by eliminating some requirements that were attached to the federal money, port officials say.
The governor has made port expansion an economic development priority during his year and a half in office. In March 2011, Scott awarded $77 million to deepen the Port of Miami, allowing it to accept bigger ships slated to begin using a wider Panama Canal in 2014. In July 2011, state transportation officials broke ground on a $42.5 million overpass at Port Everglades near Fort Lauderdale.
Other projects include $22.5 million earmarked in February to expand and modernize the petroleum terminal complex at the Port of Tampa.
Florida Ports Council president Doug Wheeler said Thursday’s announcement underscored the Scott’s repeated support of building port infrastructure at Florida’s 15 deep water ports..
“We look forward to continuing our work with Governor Scott and the Florida Department of Transportation in identifying future strategic port investments,” Wheeler said.
–News Service of Florida