Florida Faces Even Larger Budget Shortfall

TALLAHASSEE -- Florida's sagging economy has slowed down more dramatically than even the most pessimistic state forecasters had predicted, leaving lawmakers Tuesday with $2.9 billion less than they expected and guaranteeing painful cuts will affect everything from classrooms to hospitals and prisons.

State economists said Tuesday that all state revenues -- from sales taxes to documentary stamp taxes to corporate income taxes -- have fallen sharply behind forecasts. Many warned that the outlook will not likely improve until at least 2009.

''We're in a recession,'' said Don Langston, the House of Representatives' chief economist and a member of the Revenue Estimating Conference, which prepared Tuesday's report. ``Not all economists would agree, but probably a lot of the stuff that's been happening in Florida has not shown up yet nationally.''

Lawmakers, dealing with money woes even before Tuesday's forecast, have begun pushing bills this session to reduce prison populations, including decriminalizing driving with a suspended license and looking at whether to reduce criminal penalties and mandatory-minimum sentences.

SIGNS WERE THERE

Economists said that many of the signs of the ''bleak'' revenue picture -- a slumping housing market, higher gas prices, a decline in tourism, lower consumer spending and a drop in corporate profits -- have been mounting for several months, but none of the forecasters realized it would be this bad.

The news is dour for both the current fiscal year, which ends June 30, and the new one that begins July 1. For the current year, lawmakers had already cut $1.1 billion in October from the $70 billion budget they approved in May, and will now have another $1 billion less.

The grim budget news came on the eve of a legislative vote Wednesday on a $512 million budget-cutting package for the current year. House leaders said lawmakers will tap unspent reserve money to cover the rest of the $1 billion shortfall.

For the coming fiscal year, lawmakers already expected to have $2.5 billion less than forecast last year. On Tuesday, they were told that number will be $4.4 billion.

MAKE PRIORITIES

Gov. Charlie Crist remained upbeat, although he quipped that the professional economists' predictions were as reliable as a weather forecast.

''It's going to be hard, there's no question about it,'' he told a gathering of Orlando businessmen and women. ``We'll determine what the most important things are to fund first -- from my perspective, it's education and public safety -- and we're not going to raise taxes.''

The refusal by the governor and Republican legislative leaders to consider any ideas to increase state revenues has many Democrats fuming. Many say they probably won't vote for budget cuts for this year or the next, not only because they can bash the financial stewardship of Republicans in an election year, but because they believe that the failure to avoid cuts in crucial government programs is irresponsible.

House Speaker Marco Rubio, a West Miami Republican, said House economists ''saw this coming'' because Florida was being ''disproportionately'' hit by the economic downturns.

But he said that the dire forecast is not about the state budget or state stewardship.

''We're not in a budget crisis,'' he said. ``These budgetary numbers that you are seeing here are the reflection of an economy that is suffering, not of a government that is suffering.''

Rubio said that it's not the government's job to stimulate the economy, but to create the conditions that stimulate it by encouraging spending and entrepreneurship.

THE CONSEQUENCES

In the meantime, legislators will have to address the effects of the economy -- such as increasing crime rates and prison population. A Senate committee heard Tuesday that Florida needs 11,300 more beds and two new prisons annually for the next five years to keep pace.

The budget cuts are also prompting cries from hospitals, especially the 14 ''safety net'' hospitals that provide the bulk of care to the uninsured and poor. They say their reimbursement rates through Medicaid are already too low, and a plan by legislators to freeze rates by more than $100 million next year will cripple them.

Miami Children's Hospital, for example, would face about $7.3 million in cuts, which is equivalent to 462 average hospital stays for children or 26,000 emergency-room visits.

''We'll still provide the care, but it makes it tougher to fulfill our core mission: to provide care for children who are sick,'' said Nancy Humbert, a hospital vice president.

As for the current year budget, lawmakers are expected to pass it Wednesday, and Crist said he will sign it. He said he was satisfied that lawmakers have ''done a very good job'' and avoided some of the worst cuts.

Source: Miami Herald

With gas prices up this winter, tourism was down a bit; however, I expect the record snowfalls up north probably helped us there. With the dollar being low, we're still well-positioned as a great tourist value for the foreign travelers, although I expect our tourism from within the country will drop precipitiously unless the oil bubble bursts between now and the end of summer.

As for the increasing crime rates....well, until such time as it becomes "cool" for our young to continue their educations instead of dropping out with burglary, armed robbery and dealing drugs becoming their career options, I expect it will continue to increase. Uneducated kids that were good with their hands used to be able to work construction and landscaping; however, they've been replaced on the job by illegal aliens. Whether they've been replaced because the illegal aliens are here to work and actually show up on Monday morning or whether it is because they are cheaper to hire is up to you to decide.