State economists slightly increase Florida revenue estimate for current, next budget years

Small increase seen in Florida revenue estimate

TALLAHASSEE, Fla. — State economists crunched numbers into the night Friday, but preliminary figures show Florida’s general revenue will be a bit higher than previously forecast for the current fiscal year and the three that follow it.

The revised estimate reflects an expected improvement in Florida’s economy.

The higher revenue forecast for the next budget year, however, may be too small to overcome a looming gap between income and anticipated spending needs that could top $2 billion.

The increase in general revenue was expected to range from $126.5 million to $481.3 million for the current fiscal year’s $66.5 billion budget.

It could be $102.9 million to $452.6 million more in the 2010-11 budget year, which begins July 1. Gov. Charlie Crist will use that forecast in his budget recommendations to the Legislature.

General revenue that consists mostly of sales tax makes up about a third of the total budget and is used primarily to pay for day-to-day operations including salaries of state workers and public school teachers.

“It’s definitely an improvement,” said Amy Baker, coordinator of the Legislature’s Office of Economic and Demographic Research.

Earlier this week, though, the economists also predicted property tax revenues that support Florida’s public schools will drop by 9.5 percent next year due to continuing declines in real estate values and new construction.

That will put additional budget pressure on lawmakers. They could increase the property tax rate, fill the gap with general revenue, cut school spending or a combination of those options.

Baker said the new estimate fine tunes the last forecast made in August. While the difference in dollars is relatively small, making those adjustments was difficult because the state and national economies are beginning to come out of recession.

“We’re at an inflection point,” Baker said. “You know you’re turning. How fast? How quickly? Are we all the way there yet? Those issues are very difficult to judge.”

The economists met for more than six hours — the longest estimating conference in Baker’s memory — to decide policy issues before turning to their calculators and computers to churn out the final estimates.

They argued at length over such issues as the effect on future sales tax collections of a $32 million increase this year due to the federal Cash for Clunkers program.

The estimates include about $40 million a year in service charges owed to the state that county clerks of court are refusing to pay.

The clerks say they cannot afford the fees being assessed for the first time this year under a new state law that brought their offices into the state’s accounting system, but Baker said the economists could not ignore that law.

“It’s a risk to the forecast until it’s resolved,” Baker said.

The economists also increased the current year forecast by $20 million and next year’s by $15 million because they now expect a school voucher program supported by credits on corporate and insurance premium taxes to fall short of its $118 million cap by those amounts.

Corporations and insurers get dollar-for-dollar tax credits for donations they make to the program that pays private school tuition for low income students.