Economists warn of another big Florida budget deficit

TALLAHASSEE -- Another year. Another budget deficit.
A new financial report shows that all the tax increases, spending cuts and raids on savings accounts weren't enough for Florida's budget, which could have a deficit next year of as much as $2.6 billion.
The main cost-driver: Medicaid.
The subsidized healthcare program for the poor is growing as the economy shrinks. And the federal stimulus money that helped the state avoid deep budget cuts runs out next December -- in the middle of next budget year.

The numbers are the latest sobering reminder that the federal stimulus package didn't so much stimulate Florida's economy as it did bail out the state budget -- temporarily.

Amy Baker, head of the Legislature's Office of Economic & Demographic Research office, told the Senate's budget committee Tuesday that the state's sales tax-fueled budget of $66.5 billion won't get a huge shot in the arm, even in the holiday season.

``Christmas is probably going to be rough,'' said Baker, who presented the financial numbers to the committee. ``I don't think you're going to see a Christmas like we normally see.''

Next legislative session also won't resemble this year's. It will also be an election year, so the chances of tax increases are slimmer from a Republican Legislature under a Republican governor who is running for the U.S. Senate in a heated primary.

This year, the Legislature and Gov. Charlie Crist approved $2.2 billion in higher taxes and fees.

Lawmakers said they won't know how big the budget deficit will be until the federal government decides how much of the Medicaid program it will pay for. Senate budget chief J.D. Alexander fretted that the federal government could pick up so little of the Medicaid tab that it could cost the state an extra $3 billion.

Alexander said the state needs to be on guard.

``It's devastating,'' Alexander said. ``Three billion dollars is equivalent to a penny sales tax.''