Florida’s massive budget surplus — created in part due to a huge influx of federal coronavirus relief payments and a quickly recovering economy due to the state’s push to keep businesses open during the pandemic — is getting even larger.
State economists met Friday and crafted a new forecast that predicts state lawmakers will have nearly $4 billion more in general revenue to spend when they start work on a budget for the fiscal year 2022-2023, which begins July 1.
The biggest reason for the jump in general revenue is a surge in sales tax collections which have greatly exceeded even the estimates that were drawn up this past August.
There has also been an uptick in taxes charged on real estate transactions, which economists contend will continue to remain higher until anticipated higher interest rates on mortgages kick in later in 2022.
Economists during the course of the day went back and forth over the continued impact of federal stimulus dollars and how much spending would continue in the years ahead.
“We are going to lose steam from this going forward because we are not getting any more big slugs of federal money related to Covid at this point,” Amy Baker, the Legislature’s top economist, said.
Holger Ciupalo, the Governor’s Office’s economist on the panel, disagreed with Baker, saying, “You had the stimulus payments going into the economy,” he said. “Now they are employed.”
Friday’s news from the top economists means legislators will have more than $11.2 billion in unspent general revenue from the current budget year, which ends June 30.
Add to that the estimated amount of money that will come in during the 2022-23 fiscal year that starts on July 1 and it means that Legislators will have an estimated $50.4 billion in general revenue to appropriate.
Legislators will now spend the rest of the 60-day Legislative Session working on a new budget for the next fiscal year. While they meet in Session annually and pass hundreds of bill the General Appropriations Act, or the budget, is the only bill lawmakers are required to pass.
Lawmakers usually wait until the new general revenue estimates come out before they start making actual spending decisions. That means the House and Senate can jump into budget making as early as next week.
While there have been budget surpluses in the past, the current windfall is unprecedented and could lead to a spending frenzy as lobbyists and legislators seek to obtain money for their pet projects. But some Republican lawmakers have cautioned that they do not want to sign off on huge new expenditures especially since chunks of the available money are one time only windfalls.
“It’s important to me that we continue to pay for recurring state costs with recurring state funding and use one-time federal funds to continue to invest in long-term infrastructure projects that create good jobs in the short-term while benefiting generations of Floridians to come,” Senate President Wilton Simpson said in a statement.
Simpson, however, also lauded the new forecast and said that “our state remains in a lot better shape than we ever thought possible.” He did add that legislators have spending obligations to meet – such as a requirement to move up the minimum salaries paid to state workers and those in other critical services in order to comply with the voter-approved amendment that is gradually increasing Florida’s minimum wage to $15 an hour.
“As we prepare for the bulk of the budget work over the next few weeks, I think we have every reason to be optimistic,” Simpson said.