Budget Watch - The Zika Virus Will Place Additional Strain on the Next State Budget

In addition to the serious public health risk for Floridians, the Zika virus is also creating risk for the already tight state budget outlook for next year. Although a $1.1 billion federal funding package was approved by Congress in late September, Florida has yet to receive any of this aid, nor has the amount of the state’s allocation been confirmed.

Governor Scott, using his executive authority, has had to dip into state reserves to help fund Florida’s Zika detection and prevention efforts. To date, $61.2 million in General Revenue funding has been authorized. In addition, several state agencies are using existing resources to help in the effort. Costs may rise and there will likely be new Zika-related appropriations in the next state budget. Then there is the potential harm Zika can cause for the tourism industry, which will negatively affect the state’s economy and the sales taxes Florida depends so heavily on to fund the state budget.

In last month’s Budget Watch, Florida TaxWatch reported that the new state Long Range Economic Outlook forecast that the 2017 Legislature would have only $7.5 million to spend on new initiatives, after a continuation budget was funded. Moreover, Florida faced budget shortfalls of more than $1 billion in both of the subsequent two years. The first Zika-related allocation of $27.2 million was included in that forecast, but two later allocations totaling $34.0 million were not.

This makes it more certain that the Legislature will have to make significant reductions to the current budget to fund any new initiatives for next year.