| Senate Appropriations Committee Hears Economic Forecasts from State's Top Economist |
Florida’s economy is solid for now, but long-term pressures are mounting. At the Senate Appropriations Committee this week (Chair, Sen. Hooper (R-Palm Harbor)), Amy Baker, Coordinator of the state’s Office of Economic and Demographic Research (EDR), reported that while Florida’s GDP growth is nearly flat (around 1 percent for the next fiscal year; it’s expected to rebound to 2 percent or more in subsequent cycles) the state’s wage growth, however, is significantly stronger. Florida has effectively caught up with the national average, meaning it’s no longer a “low-wage state.”
However, this wage growth brings fiscal challenges as policymakers must sustain competitive salaries for both public employees and contractors.
Population growth remains strong but is driven almost entirely by in-migration rather than natural births. As Florida’s population ages — with nearly one-quarter of residents projected to be over 65 by 2030 — natural population growth is declining. After 2030, overall growth is expected to slow as younger retirees are less likely than the Baby Boomer generation to choose Florida.
At the same time, consumer confidence is weak, residential construction is softening, and state revenues are not keeping pace with spending. EDR projects budget deficits beginning in FY 2027–28 ($1.5 billion) and widening to $6.6 billion the following year unless fiscal adjustments are made. Documentary Stamp Tax collections in FY 2025-26 are expected to increase by a relatively weak 1.5 percent to $3.76 billion. Stronger growth is projected for FY 2026-27 (3.8 percent) (The Documentary Stamp Tax is a major source of revenue for environmental programs, including land acquisition).
Baker urged lawmakers to act early to manage spending and avoid deeper shortfalls later. Budget leaders echoed that while the situation isn’t dire yet, Florida’s fiscal stability will depend on proactive, disciplined budgeting now to prepare for slower growth and rising costs ahead.
Forecasts for tax revenues give a glimpse of what legislators will have available to appropriate to key agencies like the Florida Department of Environmental Protection and the Florida Fish and Wildlife Conservation Commission, as well as critical programs like Florida Forever, Rural and Family Lands Protection Program, Everglades restoration, and more. |
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