BRADENTON, Fla. - Economists on Friday delivered more bad news for Florida.
The state's number-crunchers said that since their November general revenue estimating conference, "weakness in the state, national, and world economies has deepened." As a result, the conference reduced its estimate of general revenue collections for fiscal 2009 by $1.1 billion, or 4.9% below the estimate from November. For fiscal 2010, expected revenues were reduced by $2.3 billion, or 10.6% from the earlier forecast.
That brings the overall decline in estimated revenue collections for the current year to $3.2 billion compared to fiscal 2008. And economists predict that in fiscal 2010 the deteriorating economy will result "in the fourth consecutive year of declining revenues."
Although lawmakers over the past year have reduced and delayed expenses, as well as taken money from trust funds and reserves to account for the decline in revenues, economists said Friday that they still expect Florida to have a budget deficit of $706.3 million based on current planned expenses.
The deepening budget hole results from several economic events, including the dysfunctional credit market and the global recession, which have constrained the housing market and consumer spending, as well as business investment, according to economists.
They also noted that in addition to job losses, declining tourism and exports, the state's population has ceased to grow "and is not expected to return to historic growth rates."
Gov. Charlie Crist Friday urged the Legislature to work faster on its review of a gambling compact he negotiated with the Seminole Indians. The compact as initiated by the Republican governor was struck down by the Florida Supreme Court, leaving $60 million of potential revenue from the deal not appropriated.
Crist also urged lawmakers to implement the American Recovery and Reinvestment Act. The federal stimulus bill allocates $6.9 billion to Florida over three years.
Senate President Jeff Atwater and Speaker Larry Cretul, both Republicans, said the continuing decline in state revenues was not unexpected and pledged to keep working on the state's budget problems.
"It is clear that the federal stimulus dollars will not solve Florida's budget deficit," Atwater said in a statement.
In fact, state officials are working to allocate the federal funding but the bill contains numerous requirements, and the state is still waiting on federal agencies to provide guidance on some of those requirements as well as waivers on others, Atwater spokeswoman Jaryn Emhof said yesterday.
For example, to accept nearly $4 billion in federal funds for education the state must provide $650 million in what is known as a "maintenance of effort" or matching requirement.
"We don't have $650 million, so we we're waiting to receive a waiver," said Emhof.
In addition, legislators also are working to identify long-term implications of some of the stimulus bill's requirements, such as policy changes necessary to receive funding for unemployment compensation, Emhof said.
Some of the federal funds are earmarked for pass-though to local governments, and a process to accomplish that is under way.
Still, the federal stimulus will not solve Florida's anticipated budget deficit in the current year and the state's economic decline has led all three major rating agencies to place negative outlooks on the state's credit rating.
The state's general obligation equivalency debt rating is AAA by Standard & Poor's, AA-plus by Fitch Ratings, and Aa1 by Moody's Investors Service.