A possible economic contraction and anticipated needs for new money could result in lawmakers acting more conservatively as they forge the state’s nearly $90 billion spending plan.
Chief legislative economist Amy Baker gave a bittersweet update to state House budget committee members on Tuesday.
Florida’s economic indicators are healthy, with some even better than pre-recession levels, Baker said. But it’s cyclical, and the expanding economy is in a “very mature stage.”
Baker told lawmakers that the current economic expansion turns 10 years old in June. Lasting another month would make it the longest expansion ever recorded, according to the Office of Economic and Demographic Research, or EDR.
“That tells us we need to start watching what’s happening and thinking about what’s happening in the future,” Baker said.
House Appropriations chair Travis Cummings, an Orange Park Republican, agreed. He told reporters after the meeting that budget writers during the next two years should be “very, very cautious.”
“I think it’s our job really to not tie the hands of future Legislatures,” Cummings said.
That means keeping up healthy state reserves and balancing the budget.
Last year lawmakers left an extra $1.2 billion on the table after passing an $88.7 billion fiscal plan. The balance outlook has since improved to $1.72 billion, Baker told lawmakers.
But complicating matters is the need for an additional $6 billion in General Revenue over the next three years, as anticipated by EDR.
As well, the costs of Hurricane Michael are shaping up to be “more expensive in total” than Hurricane Irma, Baker said.
Baker’s presentation adds a bit of sour grapes to the good news delivered last month that Florida, over the next two years, should collect $365.2 million more in revenue than previously anticipated.
According to Cummings’ comments, which somewhat echo those of Senate counterpart Rob Bradley, it won’t be a spending spree in 2019.
Cummings said that he does not plan “to live for the day” this Session. Instead, he’ll focus on “making sure Florida’s in a good, stable environment as we move toward maybe more volatile times in our economy.”