• Logout
  • Member Center

Florida economy turnaround projected for 2010

Associated Press

State economists added more doom and gloom to their outlook for Florida's economy with an update Thursday that reflects the global financial meltdown and higher-than-previously-expected unemployment.

In July, the economists predicted Florida's slump would begin turning around by the start of 2010. Now, they say it'll be three months later.

''More important than that, we've really slowed down the kind of recovery we're going to see,'' said Amy Baker, who heads the Legislature's Office of Economic and Demographic Research.

''We had looked at having what we call a fast snapback, which means that we would be back to normal pretty quick,'' she said. ``Now we're saying it's going to take a while.''

The economists now say normal growth won't return until the 2010-11 budget year, 12 months later than their previous estimate.

The biggest reason is that Florida's unemployment has risen faster and higher than forecast in July. The expectation then was that it would top out at 6.2 percent -- but not until the last quarter of 2009.

It exceeded that level just a month after that forecast, hitting 6.6 percent in August. It remained at 6.6 percent in September. That was the highest it has been in 14 years.

Florida is experiencing heavy job loss in construction, manufacturing, professional and business services, financial services and transportation. Construction, auto and light truck sales and tourism also are down. Wild fluctuations on Wall Street and in the credit market are making it difficult to predict what's going to happen in the near- and far-term.

''Things are getting murkier each day,'' said Clyde Diao, an economist in Gov. Charlie Crist's office.

The new economic forecast will be the basis of next month's estimate of the state's general revenue for the rest of the current budget year, which began July 1, and future years.

The last revenue estimate in August reduced the forecast by $1.8 billion for the current $66 billion budget, resulting in a $1.47 million deficit.

Crist and a special legislative committee plugged less than half of that hole by tapping reserves from the budget stabilization fund.

That still left a $795 million gap. It'll get bigger when the November revenue estimate is completed, Baker said.

The Florida Constitution prohibits deficit spending, so that leaves the governor and Legislature with a dilemma.

Even before the budget went into effect, Crist had ordered agencies to hold spending back by 4 percent. Officials may need to make additional cuts, take more money out of reserves or borrow from a tobacco settlement trust fund that had been set aside to pay for children's and health programs for years in the future.

Join the discussion

Note: If this is your first time using our NEW commenting system, you will have to LOG OUT and then LOG BACK IN.

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. In order to post comments, you must be a registered user of MiamiHerald.com. Your username will show along with the comments you post. Thank you for taking the time to offer your thoughts.

Comments (0)
  • Videos

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category