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Financial answers sought for hurricanes
September 16, 2019
Jim Turner
TALLAHASSEE --- A new way to financially brace for hurricanes will be part of budget talks among Florida lawmakers, who are looking at having a slowdown in tax dollars coming into the state the next couple of years.
Members of the House Appropriations Committee said Monday they need to discuss changes to hurricane funding after getting an updated economic forecast from Amy Baker, who leads the Legislature’s Office of Economic and Demographic Research.
“North Florida was great to us (South Florida) when we had Irma come through. I think we tried to do the same thing back to the Panhandle when Michael came through,” said Rep. Evan Jenne, D-Dania Beach. “It’s just something I think we as a state need to look at for the long-term protection of our citizens.”
Appropriations Chairman Travis Cummings, R-Fleming Island, said the topic has already been pushed by some members because of the storms the past three years.
“I do think that the recurring standpoint of multiple hurricanes are to a point that it probably would be a good idea to try to have some planning,” Cummings said after the meeting. “Either you increase reserves, or you try to allocate some certain dollars and have a plan moving forward. I don’t think we’re irresponsible not to have done that to this point.”
Because of an increase in powerful hurricanes affecting the state, the annual Long-Range Financial Outlook, put together by Baker’s office, suggests establishing a new fund to collect reimbursements from the Federal Emergency Management Agency. The fund would become a primary source to “help buttress” the state’s general revenue fund.
As another alternative, loans from a state reserve known as the Budget Stabilization Fund “could be a more direct source of disaster funding --- spreading the repayment over no more than the statutorily required five-year period and better aligning to the FEMA reimbursement practices,” the report said.
The state has spent $1 billion through budget amendments responding to hurricanes during the past three years, but the final budget impacts from the storms remain unknown because state matches for federal funds and FEMA reimbursements remain preliminary.
As of Aug. 30, the state had received $211.9 million in reimbursements for the storms.
Baker reiterated that an economic slowdown, not a recession, is on the horizon, as she gave the same presentation to the House committee that she gave to the Joint Legislative Budget Commission last week.
“We have been projecting, as you know, kind of a slowing in growth for a couple of years now,” Baker said. “It’s obviously more immediate. We’re there. We’re facing 2020.”
The forecast cautions that the state’s economic stability remains vulnerable to the potential impacts of natural disasters, especially major hurricanes, and outside forces such as escalating trade tensions and global economic downturns.
The Long-Range Financial Outlook indicates the state will get about $867 million less in revenue over two years than previously projected and will have a relatively small surplus of $289.3 million next fiscal year.
The projections rely on tourism continuing to exceed expectations, as the industry now accounts for a record-high 13.4 percent of overall revenues. Tourism has also covered for sagging construction numbers, particularly in suburban home building.
The House led the move to cut annual funding for the state’s tourism-marketing arm Visit Florida during the 2019 session from $76 million to $50 million.
Cummings said Monday House leaders have not provided direction on future funding for the public-private agency. The 2020 legislative session will start Jan. 14.
“I’m sure it’s debated again this session,” he said.