Florida’s 2021 budget is expected to be lower than it was in 2020 — due to impacts from the COVID-19 pandemic, but incoming Senate President Wilton Simpson remains optimistic about the state’s prospects.
Those were two takeaways from Simpson’s remarks at the annual Zephyrhills Economic Summit held on Oct. 12, and organized by the Greater Zephyrhills Chamber of Commerce.
Simpson, a Republican from Trilby, predicted that 2021 will be “a very challenging budget year.”
He estimated that the state budget will be between $2 billion and $5 billion less in 2021 than its $93 billion budget last year.
“We have a lot of work do this year,” said Simpson, who was first elected in 2012 and represents Florida’s 10th district, which includes Citrus, Hernando and a portion of Pasco County.
He told those attending the summit that this will be the first time since he became a state lawmaker that the state’s budget will be lower in the coming year than in the previous year.
Despite the economic setback, Florida is well-positioned for the long-term because, for the past decade, it has been investing in infrastructure and cultivating a business-friendly environment, Simpson said.
For instance, the state has not skimped on investing in deepwater ports, and other transportation and roadway improvements. It also has slashed sales taxes on manufacturing equipment — to attract large firms and higher-wage jobs.
The state has paid off about $10 billion in debt during the last decade, bringing total debt to around $20 billion. And, it has reduced taxes by a corresponding amount, he said.
Moreover, the state boasts a AAA credit rating from all three credit reporting agencies – TransUnion, Equifax and Experian, he said.
To put it into perspective, Simpson noted a similarly populated state like New York is “eight, nine notches down from a AAA credit rating.
“When you think about Florida, we’re one of the lowest tax states in the union, and there’s certain states we could probably never win because we don’t have an oil reserve here to where we can give dollars away, but other than that, we have no state income tax. From a regulatory structure, we have one of the best states to do business in,” explained Simpson.
New York, which has a population of about 19.5 million, has a budget of about $200 billion, Simpson said. By comparison, Florida’s population is about 22 million, and its budget is less than $100 billion.
“We extract half of the taxes that they extract from their system to run their government, versus our government,” Simpson said.
On a related note, Simpson said about 1,000 people move into the Sunshine State every day. The state’s population is predicted to reach about 27 million by 2035.
Taxes and regulations are two of the reasons people are moving here, Simpson said.
He observed: “What’s happening is all of your high-tax states, all of your overregulated states, those folks are voting with their feet. They’re moving to Florida.”
But, Florida has issues it must address, including the funding of the Florida Retirement System, he said. That system’s unfunded liability now stands at about $25 billion.
That situation “will keep the state of Florida restricted on how much dollars we can spend in the future,” Simpson said.
On the topic of COVID-19, Simpson praised the country’s ever-improving therapeutic medicines and pharmaceutical industry for advancing with vaccine options and trials. The lawmaker hopes an approved vaccine is produced by the beginning of 2021, then widely available by the middle of the year.
With health and safety guidelines now widely known and followed, Simpson said Florida “should not be in a situation where we have to re-shut down. The more serious we take it, the more our economy will flourish.”
Meantime, Simpson said the state’s economy “is picking up,” and showing signs of recovery since about 30% of it was shut down for two-plus months in the wake of COVID-19.
It could’ve been an even larger hit, Simpson said, if not for the state’s robust agriculture industry and other central businesses, including first responders, health care providers, education, and truck drivers and delivery services.
Simpson, himself an owner of a regional egg farm operation, put it like this: “You don’t have farmers taking any days off. You have a farmer take a day off, grocery stores are gonna run out of groceries.”
State Rep. Randy Maggard weighs in on Florida’s future
State Rep. Randy Maggard, a Republican from Dade City, another speaker at the summit, echoed much of Simpson’s sentiments on Florida’s outlook in 2021 and beyond.
The lawmaker said he’s looking forward to the coming legislative session, but cautioned tough decisions lie ahead, due to the COVID-19 pandemic.
“Going forward, it will be a little bit challenging on appropriations and money,” said Maggard, who’s district 38 covers most of Pasco County east of U.S. 41. “You heard the senator (Wilton Simpson). We’re gonna be down. When you have that much of your businesses not producing revenue, something’s gotta give, but I think we can do it,” he said.
“At the end of the day, Florida will come out of this extremely well, just because of how it’s been ran. The legislators before me were always planning for the ‘what if,’ whether it’s a hurricane, a pandemic, but we were able to absorb a lot of that,” he said.
Maggard also addressed the state’s failures in providing timely unemployment benefits through the Florida Department of Economic Opportunity (DEO).
In defense of the program, Maggard pointed out the DEO system was never designed to handle the influx of financial assistance requests brought about by the coronavirus, particularly between March and May.
Maggard made an analogy of the state’s unemployment system with his own career, where for 30 years he’s been vice president of Sonny’s Discount Appliances in Dade City.
“I can deliver 20 items a day, I’m set up for that. But, if I have to deliver 1,000 the next day, I got a problem. Well, we had a problem, because it was millions (of people), not thousands that we were dealing with,” he explained.
Maggard added he and his colleagues have “learned a lot” from the DEO malfunctions, noting the faults should be addressed in upcoming sessions.
“The pandemic really caught all of us a little off-guard,” said Maggard, who won a special election in 2019 to finish out the seat vacated by former Rep. Danny Burgess.
“If you were not an essential (worker), it was really rough. Our office held many, many phone calls and emails trying to help individuals who lost their job, to get state funding; and, it was overwhelming. It was very humbling to see what happens to your neighbors and friends here, and we all know the system didn’t work exactly like it’s supposed to,” he said.
Published November 11, 2020