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A new economic forecast for the state of Florida shows a slight budget surplus next year, and a $1.3 billion shortfall in fiscal year 2018.
Rather than default to tax increases and new revenue schemes, incoming House Speaker Richard Corcoran, R-Land O'Lakes, threw down the gauntlet on government spending.
"We don't have a revenue problem; we have a spending problem," Corcoran told reporters Monday after the budget forecast was adopted by a legislative panel.
At the top of the Speaker-designate's hit list is Enterprise Florida, the state's chief economic development organization.
"Spending money on economic development is a bad idea," Corcoran said. "I think we have to stop spending money on the 1 percent and start spending money on essential services for the people who need them most."
Corcoran helped lead the charge against a $250 million effort to fund Enterprise Florida's Quick Action Closing Fund earlier this year. The failed proposal was an agenda priority for Gov. Rick Scott, also a Republican.
Enterprise Florida, chaired by Scott, is a public-private partnership offering taxpayer-funded incentives to businesses looking to expand or relocate to the state.
When asked if it should be "bulldozed to the ground," Corcoran further set the stage for conflict with the governor, saying that's a discussion that will definitely take place during the next legislative session, which begins in March.
"You have to understand that Enterprise Florida over the last umpteen decades has been in the acquisition of power. There's a lot that's been put into it that doesn't belong," he said.
Other "1 percent" items on the chopping block are taxpayer-funded tourism marketing programs and excess hospital funding.
"In the last two years we've spent over $500 million for the 1 percent of hospitals that are making billions of dollars a year," Corcoran added.
Former state Senate President Tom Lee, R-Brandon, stood beside Corcoran and said he agreed.
"By every reasonable metric, Florida's economy is growing. We're just struggling to balance our spending with improved revenue streams. The current levels of spending are not sustainable," said Lee.
According to the long-range financial outlook, Florida's gross domestic product exceeded the national average for the past three years. Personal income grew in 2015, unemployment was at 4.7 percent as of July, and home sales last year exceeded those of 2005, a peak year.
The report also noted that population growth is the primary engine of the state's economic growth, and it predicted an annual population increase through 2020.
Those improved economic conditions helped fund the current state budget of $82.3 billion, a record.
But state economists expect only a $7.5 million surplus next year, offering virtually no wiggle room for discretionary spending.
Unless changes are made, fiscal 2018 would be the first year since 2010 that the Legislature won't have enough money to cover its expenses - despite the growth in revenue afforded by the much-improved economy.
The shortfall is projected to worsen in 2019, at $1.9 billion. A balanced budget, however, is constitutionally required.
Lawmakers could dip into Florida's trust funds and reduce the state's $1 billion annual cash reserve to close the 2018 budget gap, but such measures won't provide a long-term solution, the forecast stated.
Corcoran defended recent tax cuts during the press availability, saying that reducing property taxes and cell phone fees that were added during the 2008-09 recession was the right thing to do.
He vowed to uphold education and health care safety-net services, about two-thirds of the budget. But that doesn't mean lawmakers won't make any cuts, he added.
Incoming Senate President Joe Negron, R-Stuart, has already announced higher education and water storage as his legislative priorities. Corcoran said that any new spending would have to come from reductions in existing programs.
"Unequivocally, there are tons of things in this budget that should be cut, need to be cut and will be cut," he said. "I don't care if you're Republican or Democrat, every single government person comes up here and spends money like a teenager in a mall with a first-time credit card. It's got to stop. We've got to start cutting up the credit cards."