Rising government costs and crumbling tax collections are leaving lawmakers facing a $2 billion budget shortfall next year, Senate President Mike Haridopolos said Thursday, a prospect few saw coming only months ago.
“Everything is on the table,” said Haridopolos, R-Melbourne, although he acknowled that tax increases are not. “But in June, I thought we’d be in a continuation budget. All the signs had us pointing in the right direction….But now we’re very concerned with revenue shortfalls.”
The House budget committee earlier Thursday estimated that lawmakers could come up between $1.1 billion and $2.2 billion short next year. The current year’s $69 billion budget was balanced by cutting spending, pulling cash from trust funds, and making government employees pay 3 percent of their pay to help cover pension costs.
A similar balancing act looks likely to commence in January, when lawmakers convene the 2012 session.
Florida economists are scheduled to meet Tuesday. They are expected to revise the state’s revenue forecast downward, with tax collections declining in the increasingly fragile economy.
Glimmers of trouble were evident this week, when funding for courts, road projects and school construction all reported shortfalls linked to the economy. But the news is a sharp departure from early last month, when economists forecast three years of clear budget sailing.
At that time, though, another leading senator, Don Gaetz, R-Niceville, conceded lawmakers would be wise not to celebrate over what appeared to be sufficient revenues to cover state spending through 2015.
Gaetz, in line to lead the Senate following next year’s elections, said last month that Florida’s economy is “on a knife’s edge.”
“We can’t move much, one way or the other, without some real damage,” Gaetz said.
House Budget Chair Denise Grimsley, R-Sebring, said next year was beginning to look all to familiar.
“2012 is going to be another challenging year as we face a potential $2 billion shortfall; however, I am confident we will once again solve our budget challenges while keeping taxes low and encouraging private sector economic activity,” Grimsley said.