Leaders up on state finances, down on new programs

By Jim Turner
News Service of Florida

Florida’s financial outlook is in “great shape,” barring a direct hit from a hurricane or another pandemic, officials said.

And even with an anticipated influx of tax dollars, don’t expect budget leaders to support proposals for new or expanded programs as lawmakers hold an election-year legislative session that begins in January.

The Joint Legislative Budget Commission last Friday accepted a report known as the “Long-Range Financial Outlook” from state economists, with lawmakers expected to use the information as they put together a 2022-2023 spending plan during the session.

The report shows that economists, acting as the state Revenue Estimating Conference, have “increasingly gained confidence that the economy is largely returning to normal” after the state’s initial financial hit from the COVID-19 pandemic.

House Appropriations Chairman Jay Trumbull, a Panama City Republican who is co-chair of the Joint Legislative Budget Commission, said the report indicates “the state’s budget is in great shape.”

Trumbull pointed to the decision to reopen Florida’s economy while other states remained on pandemic lockdown and “prudent” budgeting by the Legislature.

“Compared to our position last year — when we were facing a much lower revenue forecast — our current outlook is very positive,” Trumbull said.

The overall projected ending balance for the 2022-2023 fiscal year, which will start July 1, is about $7 billion. “However, the increasingly positive budget outlook each year is reliant on the projected balance forward levels being available and the minimum reserve not being used,” the outlook said.

Economists last month projected lawmakers will have an additional $2.6 billion to play with in general-revenue taxes during the current fiscal year and the 2022-2023 fiscal year, along with nearly $6 billion in unspent federal coronavirus stimulus money.

Trumbull said lawmakers shouldn’t plan on using extra state revenue for new projects.

“Even though this outlook shows positive news, I do want to caution folks that these sizable balances depend on the Legislature continuing to show restraint in creating or expanding recurring programs,” Trumbull said.

Asked after the meeting if that means a ban on creating or expanding state programs, Trumbull replied, “that’s what I said.” Senate Appropriations Chairwoman Kelli Stargel, a Lakeland Republican who co-chairs the joint House and Senate panel, added, “I agree.”

The outlook also doesn’t assign potential costs for disasters, such as hurricanes or another pandemic.

“That is something that is out there, but you can’t really plan specifically for that. It just kind of goes year by year,” Stargel said. “That’s why it’s an outlook. That’s consistent with how we’ve done in the past.”

When disasters hit, economists said, the governor can dip into unallocated general revenue, which is about $7.3 billion currently. Also, if necessary, the state can tap a reserve known as the budget stabilization fund, which has $2.7 billion available.

While the state has more revenue, the outlook projected a need to increase state spending on Medicaid by $1.2 billion next fiscal year. Medicaid caseloads in Florida are expected to top 5 million this fiscal year, exceeding the pre-pandemic peak when there were just over 4 million in the 2016-2017 fiscal year.

Sen. Audrey Gibson, a Jacksonville Democrat and member of the budget commission, said she had concerns the data doesn’t factor in expanding services to certain vulnerable people.

In July, the state Agency for Health Care Administration reported 4.846,412 poor, elderly and disabled people relied on the Medicaid program as of June 30. The program is jointly funded by the state and federal government.

And while the number of beneficiaries is forecast to taper off over the next five years, enrollment is anticipated to remain above the pre-pandemic peak.

The forecast has beneficiaries dropping to 4.94 million in fiscal year 2022-2023. By fiscal year 2026-2027, the caseload should be at 4.69 million.