BRADENTON, Fla. - Florida’s budget surplus, projected at $845 million in fiscal 2015, could quickly erode because of congressional action, or inaction, on the federal budget and debt ceiling, state lawmakers learned Wednesday.
While an ongoing fragile housing market has the potential to slow the Sunshine state’s economic recovery, critical federal decisions could also alter the revenue forecast for the next budget, the state’s top economist, Amy Baker, told the Florida House Appropriations Committee.
In the next month, Congress must decide whether to allow full implementation of sequestration and if the country’s borrowing authority should be capped.
Economists project that full sequestration could cost Florida, directly and indirectly, nearly $8 billion and 79,459 jobs.
Another factor that could take a toll on revenue collections is a dip in consumer sentiment in July that “probably has a lot to do with looking ahead to sequester and the debt ceiling,” Baker said.
That, in turn, could reduce state sales tax collections, which are the primary source of funding for the budget because Florida does not have a state income tax.
State lawmakers heard the budget projections, and uncertainty related to the federal government, during a fall committee meeting in advance of the 2014 legislative session, which begins March 4.
Economists will meet in November to update the fiscal forecast before major work begins on the 2015 state budget.
Triple-A rated Florida currently is projected to getan $845 million windfall in revenues after typical budget expenses in the next fiscal year. However, more than half of the excess revenue is nonrecurring.
Baker has warned that funding recurring programs, such a tax cut, would reduce budget revenues in the future.
Republican Gov. Rick Scott, who proposed spending $500 million of the surplus, held meetings across the state recently seeking ideas on how to allocate the money.
A number of business owners suggested that Scott continue to focus on corporate tax cuts.
During a rally at the state capital on Thursday, parents, teachers, community activists, and at least one lawmaker said they came together to urge Scott to invest any additional state revenue in public education “instead of tax giveaways to corporate special interests.”
“This is all about priorities,” Rep. Karen Castor Dentel, D-Maitland, said at the rally. “The choice before the governor is between investing in our public schools and Florida’s future versus providing another round of special interest tax breaks.”