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 health care 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 in December — in the middle of the next budget year.
The numbers are the latest sobering reminder that the federal stimulus package didn't so much as stimulate Florida's economy as it did bail out the state budget — albeit temporarily.
Amy Baker, head of the legislature's Office of Economic & Demographic Research, 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 be an election year, so the chances of tax increases are slimmer from a Republican Legislature under a Republican governor running for 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 for Medicaid that it could cost the state an extra $3 billion. Alexander acknowledged it was a worst-case scenario, but he said the state needs to be on its guard.
"It's devastating," Alexander he said. "Three billion dollars is equivalent to a penny sales tax."
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