Florida Unemployment May Hit 12 Percent This Week
Florida’s unemployment rate is heading toward 12 percent – possibly as soon as Friday when the latest statewide numbers are slated to be released, economist Amy Baker told a Senate panel Wednesday.
With 1.1 million Floridians out-of-work, Baker said that housing, credit markets and even new developments like the recent crop freeze and a possible influx of Haitians fleeing their earthquake-ravaged homeland continue to cloud the state’s economic forecast.
“Florida is on a different recovery path than the nation as a whole,” Baker told the Senate Ways and Means Committee.
Baker and University of Florida economist David Denslow traded views on how the state is rebounding from the recession that began in December 2007 and which, nationally, has officially ended.
Both analysts, however, acknowledged that with unemployment topping the 10.5 percent national average and foreclosures among the nation’s highest and outstripping home sales, Florida’s going to remain in an economic trench for a while.
“It’s not until 2012 that we see the sort of growth Florida is used to,” Denslow said.
Even that, Baker said, will amount to a modest uptick.
“We’ll hover around the bottom for a while before we start to pick up,” Baker said. “We think it’s going to be sometime in 2011, which is more than a year from now, that we start to see normal growth rates…But at that point, remember that even though you may have normal growth rates, it’s coming off a very, very low ebb.”
The fragile economy also is leading to a protracted slump in state tax collections, with the $66 billion budget likely to come up about $3 billion short for 2010-11.
Baker provided some solace to Senate budget-writers saying that state revenues were currently flowing-in close to the levels forecasted and were unlikely to change dramatically by the time the March regular session begins.
Senate President Jeff Atwater, R-North Palm Beach, opened Wednesday’s committee hearing by apparently drawing a line on any tax or fee increases this session. Last year, lawmakers relied on more than $2 billion in fee hikes.
But Atwater insisted, “The people of Florida have no more money to send us,” adding, “we will not extract one more dollar.”
By pointing the Senate in one direction – cutting – it is likely that Medicaid and other big-ticket health and human services programs will be dragged onto the chopping block. But to draw down federal stimulus money – which last year plugged a $5.5 billion hole in the budget – lawmakers are required to maintain spending levels for such high-priced programs as Medically Needy and the Meds-AD program for aged and disabled Floridians.
In an effort to bolster public school funding this election season, lawmakers also could look to forced counties to increase county property taxes – the required local effort that counties must meet to draw down state dollars.
“I know the president would like us to avoid doing that, but we’re going to have to look very hard at that,” said Senate budget chief J.D. Alexander, R-Winter Haven. “I can’t tell you today how we’ll get there. But we’re looking at various components to a potential plan.”