Michael Moline
State officials trying to nail down how much money Florida government will have to spend next year confronted two major uncertainties Monday:
Whether and when a long-expected surge in housing construction will arrive.
And whether Donald Trump will govern as he campaigned.
“It’s really too early to build in anything that’s unique to the Trump administration,” Amy Baker, the Legislature’s chief economist, said following a meeting of the state’s Revenue Estimating Conference.
“We don’t know the timing, how, or what it will look like yet,” she said of Trump’s economic plan. “A lot of unknowns.”
Don Langston, representing the House, concurred during the panel’s discussion.
“Who knows what this looks like in the next two to three months?” he said.
The state’s general revenue fund is expected to run on razor-thin margins next year and into the red in subsequent years.
A panel comprising Baker and representatives of Gov. Rick Scott and the House and Senate pored over national economic projections prepared by an outside consultancy; the officials will look at Florida-specific numbers Friday.
The report arrived around the same time Trump won the presidency — too early to account for his policies as president, Baker said. Conference staff called it the “Trump effect.”
“They relied heavily on things looking in the future just like they have in the past, until they know better,” Baker said.
When the conference last met in July, the projection was for a 9.5 percent rise in housing starts during 2017. Now they expect 1.9 percent, with a 9.1 percent surge pushed into 2018.
“Instead of it being a two-year recovery” in that sector, “they’re looking at a three-year recovery,” Baker said.
Construction — especially housing starts — is a big piece of the state economy, fueling collection of sales and real estate taxes, among others.
“We’re real dependent on housing construction coming back,” Baker said. “That’s probably our biggest worry.”
