TALLAHASSEE, Fla. (AP) — Florida economists spent hours on Friday trying to figure out whether or not automatic spending cuts at the federal level would dampen the state's economy.
The Florida economy has been showing signs of a slow recovery, but the fear among economists, as well as some legislative leaders, is that federal cuts in defense spending and other areas would lead to less spending in the state.
In December, economists projected that the state's tax collections — one sign of the economy's health — will grow around 5 percent for the next two years. But that was before the bruising battle between President Barack Obama and Congress over whether to let spending cuts go forward.
Florida economists went back and forth during the day over whether to adjust the 5 percent figure downward based on the still-uncertain impact of the budget cuts — or project a slight overall increase based on spending patterns in the last few months. They still had not come up with a final estimate by Friday evening.
State legislators will use the final estimates to build a new state budget they are expected to pass between now and early May. The amount of money available could determine if legislators will agree to spend money on Gov. Rick Scott's priorities such as a $2,500 teacher pay raise. Some top Republicans have suggested the state may need to boost its reserves because there's too much uncertainty related to the cuts.
Amy Baker, the head of the state's Office of Economic and Demographic Research, said economists initially were looking at whether the cuts would create a "one time shock" this year.
The automatic federal cuts that took effect earlier this month were expected to result in the furloughs of thousands of civilian employees. The Pentagon has estimated the furloughs would result in a payroll reduction of $185 million to federal employees in Florida.
The forecast adopted back in December projected that the state should take in nearly $25 billion in the coming year in its main budget account, or an increase of about 5.3 percent. That amount is expected to grow to nearly $26 billion in the fiscal year leading up to Scott's re-election campaign or about 4.7 percent. The state's fiscal year runs from July 1 to June 30.
The state's overall budget is nearly $70 billion, but that's because it includes federal aid for such programs such as Medicaid, the safety-net health care program for the poor, and money that is spent on road-building and transportation.