September 14, 2001
The State of Florida’s Revenue Estimating Conference convened yesterday to make its quarterly assessment of the State’s fiscal status. Despite the sudden, unanticipated variables introduced by the catastrophic events of September 11, the Conference decided to proceed with this regularly scheduled meeting with the caveat that they would closely monitor any continuing adverse economic effects set in motion by the calamity.
The Conference agreed to a projected shortfall of $673 million for the 2001-02 fiscal year, due to the slowing economy. By using $408.2 million in working capital funds, reversions and vetoes, the shortfall is reduced to $265 million.
These conclusions by the Conference make any special session to address the shortfall unnecessary. State law requires a special session when a deficit reaches 1.5 percent of the general revenue budget. This net shortfall projected by the Conference rises only to 1.3 percent of the general revenue budget. However, since the State of Florida, unlike the federal government, cannot technically operate under a deficit, the Governor and the Legislative Budget Commission, a joint committee of the House and Senate, must now adjust the budget and make the necessary cuts to balance "the books."
Because of the tragic events on September 11 and the potential for a dramatic reduction in commerce and specifically, in Florida’s case, a reduction in tourism, the conferees agreed to closely monitor developments and to perhaps meet in November to conduct another assessment.