On Thursday, September 12 the Legislative Budget Commission approved a three-year financial outlook developed by Economists from the Office of Economic & Demographic Research (EDR). EDR’s financial outlook predicts a budget surplus of $845.7million for next year.
Highlights from EDR’s presentation include:
- Florida’s State Gross Domestic Product (GDP) real growth gain (2.4%) is slightly below the national average (2.5%) for end of the year 2012. Additionally, Florida finished the 2012 calendar year with a growth rate of 3.2%, which is slightly below the national growth rate of 3.5%. Florida experienced a negative growth rate in the first quarter of 2013 due to the expiration of the payroll tax holiday and the acceleration of dividends and salary bonuses into the fourth quarter of 2012.
- In July 2013, 1.9% nonfarm jobs were created in Florida, outpacing the 1.7% national average. Unemployment rate is still lower (7.1%) than the national average (7.4%). Additionally, the state experienced its lowest participation rate (60.0%) since February 1986, which impacts the unemployment rate.
- Building Permit activity, an indicator of construction, shows that the housing market is recovering even when Florida’s Foreclosure Rate remains the highest in the nation.
- The budget gap has been closing due to legislative actions during the 2011 and 2012 Sessions through recurring means, which positively impacted the state. The General Revenue balance has increased by $241.2 million and is now $3,354.6 million or 12.8% of General Revenue collections FY 2013-14.
- No Fiscal Strategies are required for any year in the Outlook period, since there is no budget gap during the period, the anticipated reserve is fully funded, and the budget is growing more slowly than available revenues.
- For the third time since the adoption of the constitutional amendment requiring the development of Long-Range Financial, Outlooks, sufficient funds exist to meet all Critical and Other High Priority Needs identified for the three years contained in the Outlook.
To read EDR’s presentation, visit: <http://edr.state.fl.us/Content/presentations/long-range-financial-outlook/3YearPlanLBCPresentationFall2013_9-12-13.pdf>. To watch EDR’s presentation to the Legislative Budget Commission, visit: <http://thefloridachannel.org/video/91213-joint-legislative-budget-commission/>