BRADENTON, Fla. – Florida’s revenue estimating gurus project that the state will have a windfall of $845.7 million to spend in fiscal 2015.

A state economist told legislative leaders Thursday that only $396.7 million of that surplus would be recurring revenue.

As lawmakers were briefed, Gov. Rick Scott completed a series of stops across the state soliciting ideas from the public for $500 million in potential tax cuts.

The plan by Scott, a Republican, wasn’t discussed when the Joint Legislative Budget Commission received the long-range financial outlook for the next three years, but some committee members suggested that Republican lawmakers – who control both legislative chambers - remain conservative on spending.

Uncertainties surround the state’s good financial news, said Amy Baker, director of the Legislature’s Office of Economic & Demographic Research.

In the next fiscal year, revenue collections are expected to be enough to fund critical and high priority general fund budget needs, plus $1 billion in reserves, with $845.7 million left over to spend.

The entire amount could be spent on non-recurring expenditures or tax reductions without causing a budget gap in fiscal 2016, Baker said. If it is spent on recurring expenses or tax cuts, the state would return to a budget deficit. Florida had budget gaps from 2007 to 2010 as a result of the recession that caused significant drops in revenues such as the state sales tax. The state does not have a personal income tax.

Baker warned there are additional risks to be considered when lawmakers develop the 2015 budget. The key risks are the looming “sequester effects” and that the state’s housing market remains vulnerable to increasing interest rates and a high pace of foreclosures.

“Even though last year was deemed the fiscal cliff, we’re referring to the new fiscal cliff” as the country faces the second round of automatic federal spending reductions imposed by Congress that take effect this fall, Baker said. “It will have an effect on the national economy and Florida’s economy.”

Baker said her agency is projecting a direct impact of $2.2 billion on the state’s federal grants and contracts from sequestration. George Mason University projects a total of nearly $8 billion in direct and indirect impacts statewide.

Sequestration, and the protracted period of uncertainty that could follow, is one of two “black swan” events that could have a high impact on the state, she said. Another black swan is the potential for a severe natural disaster such as a hurricane that would stress the state’s reserves.

In a review of the state’s debt, she told the panel that Fitch Ratings last month returned the state’s AAA rating outlook to stable from negative due, in part, to “sound financial management practices,” continued fiscal balance, prompt responses to budget issues. Moody’s Investors Service and Standard & Poor’s have Aa1 and AAA ratings - with stable outlooks - on Florida’s debt and have also cited the state’s conservative fiscal management.

Maintaining those standards is important in the decision-making process going forward, Baker said.

“Obviously the widely reported surplus is good news for Florida but despite our healthy surplus, it is not cause for dancing in the streets,” said House Appropriations Chairman Seth McKeel, R-Lakeland, co-chairman of the commission. “The Florida Legislature has made fiscally responsible decisions that have helped to improve Florida’s bottom line and I suggest that we not lose sight of our fiscal principles as we move forward.”

In response to the report, House Majority Leader Steve Crisafulli, R-Merritt Island, said Republican policies have helped improve Florida’s economy and “I am hopeful that these improved conditions will allow us the opportunity to provide a significant tax break for Florida families and businesses.”

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