Senate President Bill Galvano is optimistic, yet realistic, on Florida’s post-coronavirus economy.
“While the situation is very serious, I remain confident in Florida’s ability to recover, not because I am overly-optimistic, but because I have witnessed the resilience of Floridians and am confident in the fiscal decisions we have made, and will make, as a state,” Galvano wrote in a memo to Senators.
“We must remain committed to making fact-based decisions as we enter this period of transition. We must focus on strategies to help our fellow Floridians recover, while incorporating new strategies to protect the most vulnerable,” he continued.
The Senate President addressed, among other things, the absence of a complete data picture.
In comments about the March economic data expected Friday, Galvano noted that it won’t be complete.
“It is based on survey of data from the week of March 12, just as COVID-19 was first being declared a global pandemic. To provide further context, the statewide order regarding essential services and activities was issued on April 1, 2020. This means that a large portion of the Florida economy was still operating in relatively normal circumstances in mid-March,” Galvano said.
“The February unemployment rate was 2.8%, and there were 291,000 jobless Floridians out of a labor force of 10.4 million.”
Meanwhile, in the last five weeks, 660,000 Floridians have filed for unemployment, a number likely low given the myriad difficulties people have with applying.
The Senate President touched on two economic forecasts that are dark for 2020.
IHS Markit and Moody’s both see massive GDP declines in Q2, with a recovery potentially starting by the end of the year.
Galvano also addressed a Moody’s Analytics 2019 State Stress Test Report that forecasts how a recession would hit Florida.
A “moderate recession” would result in a $4 billion revenue shortfall and a 3.1% increase in Medicaid spending — a $5 billion impact in all.
A “severe recession” would produce a $5.6 billion shortfall and 3.5% increase in Medicaid spending.
Rainy day funds would drop 10.5% and 15.7%, respectively.
While this report offers guidance, Galvano cautioned against too literal a read.
“While providing some interesting analysis that will help inform our state’s [response], the stress test report by its own admission warns it is only ‘intended to help measure the magnitude of fiscal stress that states will experience’ and is ‘not a direct reflection of a state’s ability to weather that stress,'” Galvano wrote.
“The study excludes from its analysis all of the traditional reserves available to the state and the state specific impact of recently passed federal legislation. Until Florida has complete data to produce reliable estimates, this study and others provide helpful insight but not the specific information necessary for precise decision making,” the memo continues.
Some of that data, such as GDP from the second quarter, won’t be available until July.
Galvano did not specifically call for a Special Session, despite some belief that one is needed to adjust the budget.
Earlier this month, Galvano said he and state economists think the state’s $2 billion cash reserve should help weather the additional costs and lost revenue expected from the economic collapse the crisis is bringing about.
“While we expect to see significant decreases in general revenue collections beginning with the April General Revenue Collection Report through the end of our fiscal year, our current general revenue reserve cash balance, combined with other available state reserves, should alleviate any concerns regarding the need to cut the current year budget,” he wrote in a “Fiscal Update” memorandum.
Florida Politics’ Scott Powers contributed to this post.