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Business Observer Friday, Feb. 21, 2020 2 years ago

Report: Florida budget vastly unprepared for next recession

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State is in bottom tier of country in rainy day funds.

The sunshine state faces a not so sunny outlook if, or more to the point, when, the next recession descends upon the state.

That’s because Florida lacks adequate revenue to manage an economic downturn without raising taxes or cutting services, according to a new study from Moody’s Analytics. If a moderate recession were to hit the U.S., the report shows, Florida would face a total shortfall equal to 5.6% of its total 2019 revenue. That’s the 10th worst outcome nationwide.

The study estimates the fiscal shock of a moderate recession would equal 14.9% of the state’s 2019 funds. But Florida’s total balance of available funds is equal to 9.3%, according to the report, with just less than half designated specifically for a recession.

Overall, 28 states are projected to have adequate revenue to weather a future downturn, with Wyoming, Alaska and North Dakota leading the way. Including Florida, 10 states are projected to have total shortfalls of more than 5% per state of total revenue.

 

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