Florida’s tax structure will produce only $52 million in gains on existing state spending during the coming fiscal year, and will leave lawmakers more than $1 billion in the hole during each of the two budget years after that.
That doesn’t count what the state needs to spend to recover from Hurricane Irma.
The news came Thursday as the Senate Appropriations Committee began sorting through the many demands on the government’s pocketbook.
“It’s grim,” Appropriations Chairman Jack Latvala said.
“We don’t really have any extra money. We’ve had some money spent on our behalf lately that’s even making it a little tighter,” he said. “There’ll probably have to be a cut exercise, just like always.”
He referred to hurricane emergency spending ordered by Gov. Rick Scott.
Amy Baker, coordinator of the state Office of Economic and Demographic Research, reported to the committee on the budgetary picture.
“The budget they were building for next year had enough revenue for them to keep doing what they’ve been doing,” Baker said.
“But big problems in the following years, and growing,” she said. The Year 2 projection was for a $1.1 billion deficit and a $1.6 billion shortfall in Year 3.
And that didn’t account for “black swans” like Irma. Since the storm hit, Scott has used his executive authority to spend more than $141 million on hurricane response, including $25 million for emergency loans to citrus growers whose crops were wiped out.
Meanwhile, Monroe County, to name one example, likely will have to rebuild one of three hospitals in the Florida Keys. It’ll need a new or improved emergency operations center too — responders had to abandon the building because it couldn’t resist a Category 5 hurricane.
The full cost of Irma remains unclear. Visit Florida President Ken Lawson sketched out the agency’s plan to keep the tourists coming. Meanwhile, no one knows yet the full extent of the damage to state and local infrastructure, or whether the federal government will come through with emergency aid.
This, too: State pension investments are bringing in less cash. And the demands on the school system will grow, especially with the influx of new residents from Puerto Rico.
“Between what happened to the retirement system, and what they’ve already spent on Irma, you’re $140 million down,” Baker said.
“We’re going to be December before we have any confidence that we have good estimates,” she said.
“Some of these costs are certainly legitimate to be paid for from our reserves. We call it a Rainy Day Fund,” Latvala said. “And like Sen. (Joe) Negron said yesterday, if this wasn’t a rainy day, what is?”
As far as Latvala’s concerned, taxes increases are “off the table.”
As for opioids, Scott has called for $50 million to tackle the epidemic, with about half of that representing federal money.
Latvala wasn’t prepared to pass judgment on the request. “This is the very first week of committees, the very first meeting that this has been discussed. We have a lot of work to do before we make opinions like that,” he said.
He did note that he’d asked for an emergency $20 million to get opioid responders through the fiscal year.
“I’m still waiting, People are still dying. Nobody’s dying because oranges fell off of a tree. We need to treat the opioid crisis just like we’re treating the economic crisis from the hurricane, and move on it. He has the same ability on the opioid crisis, to deal with that through an executive order, as he has on the hurricane.”
Latvala did complain that Scott’s executive budget amendments circumvent the Legislative Budget Commission, a House-Senate panel empowered to authorize mid-year spending.
“I’m hopeful that we’ll be able to get back into a regular process,” he said.
“In past hurricanes we’ve had legislation that has gone into direct capital efforts like that to restore communities. I’m hopeful we’ll be able to do that this time, as well.”