5 Things to Know on Florida's State Budget
A joint House-Senate state budget committee on Thursday formally accepted a bleak set of projections produced by state economists that have transformed what had been a relatively healthy budget surplus before the coronavirus pandemic into a $2.7 billion deficit.
1. What has caused the rapid deterioration of the state's fiscal footing?
Because of Florida's outsized dependence on tourism to generate the sales tax revenue Tallahassee depends on to make ends meet, the coronavirus pandemic has hit the Sunshine State particularly hard. According to state economists, the state's gross domestic product plummeted by 31.7 percent in the second quarter, with much of the decline stemming from the pandemic's crippling effect on travel and tourism.
2. Is the deficit projection a worst-case scenario?
No. The long-range fiscal outlook adopted by the Legislative Budget Commission on Thursday makes a number of assumptions about funds —- including CARES Act dollars —- that could be used to address budget shortfalls. Those funds have yet to be authorized for that purpose. Additionally, continued weakness in the tourism sector could cause the revenue projections to worsen.
3. Was the fiscal outlook adopted unanimously?
No. Two Democrats voted against adoption, arguing the outlook is overly optimistic.
4. What can the Florida Legislature do to address the projected shortfall?
The state has $3.8 billion in reserve funding, enough to bridge the projected $2.7 billion deficit —- and then some. However, a slower-than-expected recovery from the pandemic, a "black swan" event like a major hurricane, or both could quickly wipe out the rainy-day dollars.
5. What about the pace of the recovery?
The legislature's chief economist, Amy Baker, told the panel Thursday that the recovery has effectively plateaued and that it's not likely to accelerate until next year. "We believe, until there's a vaccine manufactured and widely deployed and in place, that a number of people, regardless of what government says, are going to continue to have very limited interactions," she said. "And so, they're not going to go to stores as much as normal, they're not going to go out to dinner."
The Link LonkSeptember 11, 2020 at 02:55PM
https://www.mynews13.com/fl/orlando/news/2020/09/11/5-things-to-know--covid-hit-florida-s-budget-hard
5 Things to Know: COVID Hit Florida's Budget Hard - News 13 Orlando
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