State budget awaiting Scott’s sig to cause pain before any gain, economists sayby John Kennedy | May 22nd, 2011
The $69.7 billion state budget now before Gov. Rick Scott will send tremors through Florida’s struggling economy, with school districts, hospitals and other big employers soon cutting jobs and programs because of a sharp drop in taxpayer dollars, economists say.
Scott has generally praised the spending plan for shrinking government, cutting regulations and reducing taxes. He says it will spur private business expansion and fulfill his campaign pledge to create 700,000 jobs over seven years.
Many analysts aren’t so sure.
More certain, they say, is that state government’s pullback will lead to at least a short-term reduction in dollars coursing through Florida. It could add to the state’s 10.8 percent unemployment rate, they warn.
“A reduction in state spending? Well, first, that’s just going to reduce jobs,” said David Denslow, head of the University of Florida’s Bureau of Economic and Demographic Research.
“It’s going to be another headwind in the economic recovery,” said Denslow, an occasional adviser to the Republican-led legislature. “You’re cutting employment, reducing infrastructure spending and lowering the amount of money going to communities. That’s going to have a negative effect.”