Budget Watch - Outlook Assumes Legislature Will Sweep Trust Funds
Florida’s state forecasters estimate that the 2019 Legislature will have a $223.4 million budget surplus when it puts together the state’s new spending plan for FY 2019-20. However, this assumes the Legislature will transfer nearly $400 million from trust funds—money earmarked by law for specific uses—into the General Revenue (GR) Fund. Without the trust fund sweeps, an estimated shortfall of $78.9 million exists, climbing to $169.1 million if the Legislature passes tax cuts.
This information is contained in the new Long-Range Financial Outlook, recently adopted by the Joint Legislative Budget Commission. This constitutionally required annual report compares estimated revenues and expenditures to give the Legislature a sense of the state’s budget position going into session and whether lawmakers can expect a budget shortfall or surplus (for more description of the Outlook, see Appendix).
The Outlook further estimates the state will be facing shortfalls of $47.8 million in FY 2020-21 and $456.7 million in FY 2021-22, even with trust fund sweeps. This is due to the continuing “structural imbalance,” where the growth of the state’s recurring expenditures exceeds the growth of recurring revenues.
The Outlook recommends the Legislature adopt a “fiscal strategy” to address the imbalance and clear the shortfall in FY 2021-22. There are many ways to get there, but in the simplest terms, it would take a reduction in recurring expenditures of $199 million to eliminate the future shortfall.