Hurricane Irma Clouds Budget Forecast
The outlook is grim again for Florida’s budget drafters—and that’s before considering the cost of Hurricane Irma. State forecasters are warning the coffers are nearly empty for the third year running.
Every September, Florida’s lead economist Amy Baker gives lawmakers a preview of how much money they’ll have to work with as they craft the coming year’s budget.
“What we’re looking at for the first year 18/19—the year you’re going to be budgeting for—is a situation not unlike what we were looking at last year,” Baker tells a joint committee of lawmakers.
That isn’t good news.
Last year the meager outlook prompted House lawmakers to take a particularly hard line on spending—or at least to make a show of it. While leadership went after member projects and agency spending with a hatchet, Speaker Richard Corcoran demanded local money for schools based on property taxes remain steady despite rising home values. To make schools whole, the Legislature backfilled with other dollars and spent down trust funds to make ends meet—a point Senate budget Chief Jack Latvala didn’t miss.
“It’s striking how close that amount is to the difference of the money that we’ve been having to make up with the required local effort for schools,” Latvala says after Baker recommends cutting about $560 million annually for the next three years.
In the coming year, Baker’s projection shows lawmakers will have about $52 million. On the bright side, even with three straight years of doom and gloom long term outlooks, lawmakers have done enough—perhaps just enough—to stay out of the red.
But Baker says Florida’s luck may have just run out.
“Black swans are what we consider to be low probability but very high impact results were they to occur,” she says.
“Normally black swans are forward looking, but this one has arrived.”
That black swan is Hurricane Irma. Baker explains between a 25 percent match of federal response funds and the cost of other recovery efforts like beach restoration, the storm will stress the state’s more than $3.5 billion rainy day fund.
When it comes to that $52 million cushion of projected general revenue—it’s as good as gone.