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Kurt Lischka

Staff member
Oct 15, 2004
Florida's booming housing market will help boost the state's revenues by an unprecedented $2 billion over the next 15 months, economists said Monday.

"It's unreal," House Speaker Allan Bense said after getting the news.

The Legislature is in the middle of writing a budget for the fiscal year that begins in July. Both the House and the Senate approved budgets of over $60 billion last week and the next step is for the two chambers to negotiate a compromise before the two-month session ends on May 6.

Lawmakers knew they were going to be getting good news from the economists this week - and a general assumption was that the bottom line would be boosted by well over $1 billion, maybe a $1.5 billion.

"This is just catching me by surprise," said Bense, R-Panama City. He said he thought some of the money should be saved, some dedicated to tax cuts and some of the money spent on roads, schools and sewer systems.

Senate President Tom Lee said the boosted estimate for tax collections "could not have come at a better time." Lee, R-Brandon, has made paying for growth management a top priority.

"Our state agencies have identified an estimated $35 billion deficit in funding for schools, roads, and water supplies over the next decade," Lee said in a statement issued by his office. "It is my hope that we can use this temporary boost as a healthy down payment on our state's critical infrastructure needs."

A spokesman for Gov. Jeb Bush called the revision great news that showed Florida's "business-friendly environment is producing results." But Bush hasn't decided yet how he would like to see lawmakers spend the money, spokesman Jacob DiPietre said.

Analysts from the Legislature and the governor's office last reviewed economic data and came up with a tax collection forecast for the state's all-purpose "general revenue" fund in November.

At that time, the economists agreed that Florida's strong housing market and the rebuilding needed from four hurricanes would boost state tax dollars by $3 billion. The bottom line was $23.6 billion for the current fiscal year and $24.5 billion for the fiscal year that begins in July.

But the state's economy soared past those expectations, resulting in the latest revisions: Almost $1.1 billion for the current year and more than $1.1 billion for next year.

The boost in the forecast is unprecedented, said Alan Johansen, a committee staff director in the state Senate for finance and tax issues.

Most of the economic activity caused by rebuilding in the wake of the hurricanes was accounted for in November. The revisions that the analysts agreed to Monday is based largely on "the underlying strength of Florida's economy," said Amy Baker, one of the Legislature's top economists.

"We continue to outperform the rest of the nation on almost every measure," Baker said.

But Baker and the other analysts pointed to the real estate market in particular.

The median price of a Florida home passed the $200,000 mark earlier this year - and exceeded the national median for the first time as well, according to Frank Kowalski, a Miami Realtor for three decades and president of the Florida Association of Realtors.

And yet sales of single-family homes across the state continue to climb, with double-digit increases seen in most of the state's urban areas, Kowalski said.

"Without question, this is not only historic, this is unprecedented," he said.

The analysts said they expected the pace of economic activity to continue for the next several months and then ease off.

"There is some reason to believe that Florida is beginning to approach it's growth potential, that we're bumping up against the upper edge of what we can realistically do," Baker said.

She pointed to record oil and gas prices as factors that might slow down growth.

As well as housing, Florida is seeing strong growth in business activity and tourism and leisure spending, the analysts said.

The growth rate in the sales tax, Florida's main source of funding, is set at 12 percent for the current year and expected to slow to 6 percent next year.


Beach Fanatic
Dec 5, 2004
Bluewater Bay, FL
Just bring your own road pavement and sewer piping when you come down here. What they call the critical infrastructure gap is real and getting worse.
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