A Florida state economist told members of the Legislative Budget Commission last week that the revenue estimates for the fiscal 2010 budget have been lowered by $3.5 billion.
Lawmakers had already been informed that revenues supporting the fiscal 2009 budget were believed to be $1.8 billion less than estimated when the $66 billion state budget was approved earlier this year.
The commission next Wednesday is expected to consider recommendations from Gov. Charlie Crist on budget cuts, or the use of reserves, to shore up the current year’s budget.
The housing market decline has been more severe than anticipated, leading to a series of downward revisions in revenue estimates. Florida’s budget, which is not supported by any property taxes, relies a great deal on sales and use taxes, such as those collected on the sale of homes. The poor economy and decline in the sales of big-ticket items add to the problems.
One lawmaker suggested it may be time for the state to begin looking for new revenues in consumption-based taxes, such as hiking the tax on cigarettes.
The big plunge in revenues facing lawmakers next fiscal year is not a surprise, House Policy and Budget Committee chairman Ray Sansom, R-Destin, said last week. “No one is in a panic mode,” he added, noting that lawmakers will wait for results of the revenue estimating conference in November before formulating plans to deal with the upcoming deficit.
This year’s impending $1.8 billion deficit will be offset somewhat by $326 million that was carried over from the previous fiscal year and was not appropriated by lawmakers in anticipation that Florida’s economy would continue to tailspin. Crist has already ordered state agencies to hold back 4% of their budgets, but he has not issued a final decision on whether to cut those funds.
The Legislature also passed a law earlier this year authorizing the governor to deal with a deficit by using up to $600 million from budget reserves and up to $1 billion from the Lawton Chiles Endowment, which is the fund where the state’s national tobacco settlement proceeds are deposited.