Florida lawmakers face $2.1 billion budget shortfall

TALLAHASSEE, Fla. – State lawmakers are facing a $2.1 billion pandemic-induced budget shortfall for the budget starting in July, and that’s the best-case scenario, according to state economists.

The revenue shortfall means lawmakers will face tough decisions crafting next year’s state budget.

The word of the day at the first meeting of the Senate Appropriations Committee was unprecedented.

“The work before us is unprecedented and there’s going to be a lot demanded on this committee to think innovatively, to think how we can do things efficiently,” said Senate Appropriations Chair Kelli Stargel.

While state economists project a $2.1 billion shortfall, the number is heavily dependent on how the economy recovers, something difficult to project in a once in a lifetime pandemic.

“If you just run your models, they don’t know how to deal with this event,” said Amy Baker, a state economist at the Office of Economic and Demographic Research.

Most uncertain is the recovery of the tourism sector.

State economists predict it could take between one and two years.

“We don’t expect it to come back whole cloth even in that slow recovery,” said Baker.

And the state is also facing higher expenditures on social programs like Medicaid, which is projected to increase by $700 million.

That means lawmakers will have to look for cuts anywhere they can.

“We’re going to have a conservative budget. I’m not going to build a budget this year on the high hopes of the future,” said Stargel.

Looking to add revenue, legislative leaders already have ideas in the works.

Among them, collecting state sales already owed tax on internet purchases.

That would increase revenues by at least $700 million a year.

“I don’t believe that it’s a tax increase. I think it’s a tax collection issue, not a tax increase issue. We’re not changing the tax at all,” said Stargel.

The latest budget projections are nearly $600 million better than in September.

Additional federal stimulus could paint an even more optimistic picture, at least in the short term.

State economists’ latest projections are largely based on data from November and September.

It’s not clear how those numbers may change as a result of the fall and winter COVID-19 spike the state has experienced since then.