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The Sunshine Economy

The Sunshine Economy: State Spending Grows At Slower Rate

Tom Hudson
The 2019 Legislative session is scheduled to end May 3. Lawmakers have to approve a budget or risk a special session.

Republicans and Democrats in Tallahassee are in agreement on at least one thing as they forge a state budget that will total around $90 billion: Florida's economy is doing well. 

The state’s unemployment rate was 3.5 percent in February, and more than 25,000 jobs were added that month.

Still, the state forecast for money coming in from sales taxes is down a little bit from forecasting just a few months ago. While still growing, the incoming tax dollars are expected to grow slower in the years ahead.

General revenues, which grew by five and a half percent per year over the past two years, are slowing to less than two percent this year and averaging three and a half percent a year over the following four years, according to state estimates. The slowdown in tax revenue is leading lawmakers to slow the growth of the overall budget. After expanding by more than four percent per year over the past four years, the budget lawmakers are negotiating now represents half that growth rate -- less than two percent.

WLRN spoke with top Democrats and Republicans as budget negotiations get underway.

State Budget Trends

"The good part is we're not in a cut-budget year," says Senator Oscar Braynon, a Democrat whose district spans the Broward Miami-Dade county line. "But we also have some duties that we have to fund that make it not easy to just fund every project that we want."

"I think we're in a pretty positive state right now in terms of the budget," says Republican Representative Holly Rashcein from Key Largo. "The economy is strong. Unemployment is down and our state businesses seem to be performing pretty strong."

The economic data is strong. The state’s unemployment rate was three and a half percent in February. More than 25,000 jobs were added that month, led by work in restaurants and bars. Those jobs tend to come with lower wages. It's these kinds of employment trends that Broward County Democrat Representative Shevrin Jones hopes influences the budget talks about how to spend the state tax money.

"It's important that, as we're looking at negotiating, we talk about how to have a strong economy," he said.

That includes the two largest items in the budget, health care and education. This year, that also includes spending on the environment. Gov. Ron DeSantis made the environment a centerpiece of his successful campaign.

The House and Senate have okayed separate spending plans. The two chambers now are negotiating their differences before the end of the regular legislative session on May 3. While Florida’s economy appears strong and lawmakers seem to be adjusting their spending appetites to slower growth, a new unknown in this year’s budget process is the new governor. This is the first budget cycle for Gov. DeSantis, and except for releasing his proposed budget a month before the legislative session began, he hasn’t been very public as lawmakers have gone about their business of crafting their spending plans.

"We'll see the chips fall where they may," says Florida Chief Financial Officer Jimmy Patronis, "as an unknown governor (and) how he handles his veto pen comes on to stage."

Patronis thinks House and Senate spending plans are sensitive to the anticipated slowdown in state revenue growth. He was in the Legislature during the Great Recession and experienced the sharp drop in state money brought on by the collapse of the housing market. "Is it truly the mission of the state of Florida to be funding every single special interest niche that could be part of a particular legislator's district?" 

Patronis says he hasn't spoken with the governor about how DeSantis may approach his ability to reject spending proposals, but "I betcha it will be in excess of $100 million."

In a journalism career covering news from high global finance to neighborhood infrastructure, Tom Hudson is the Vice President of News and Special Correspondent for WLRN. He hosts and produces the Sunshine Economy and anchors the Florida Roundup in addition to leading the organization's news engagement strategy.