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HomeMy WebLinkAbout2008 11 24 Provided to City Commission by Commissioner Krebs under "Reports"Date: November 24, 2008 The attached document was provided to the City Commission by Commissioner Krebs during her "Report(s)" at the November 24, 2008 city Commission Regular Meeting. CAPITOL HILL G R 0 U P, LLP GOVERNMENTAL RELATIONS MANAGEh1ENT Florida's Financial Future November 20. 2008 Dr. James A. Zingale 11/13/08 Economic & Demographic Highlights More Measured Economy Florida's growth is now decelerating. State Gross Domestic Product (GDP) ranks us 47t" in the nation in real growth (12t" in 2006 and 2~d in 2005) and 35t" in per capita level. ~~, rt i i~ww,t u~rn~, ~n ~awi t,t~• w an~tu vw.w~ K...~r M:.~~~:.n~ r 1., ~~, ki+~ kny~.and .. a 1 w l~ilu.:i Lw•~r w., • i.~ ~'• yr U'_~ t ~ y~,, ~ ..7.r tM..,.w •'. ~ i - .. ~.c ~ ~ 1 ~~ ur e • I~A:~kx.~ ro ~~""~ ,;E,~ce a., ~.a ~,. ~, .~ ~ ., r ~ ~ ~ 1- e~ ~ `_ cr ! x ,j , r ~~•wi^[as' M~ ~ ~1 . }f": y~~,,T ~. ^ 1•.tf..ri ~ .y '~. ~~T°wu pu~. .. .. h.. . y r.~i•Vdan~ ~ ~ ~• :~ 1• :l ,Y' t.b r.ewuut. n;,.,:, Florida and United States Total Nonagricultural Employment Over-the-Year Job Growth Rates January 1974 -July 2008 (not seasonally adjusted) ~o.o __ _ _ _.-_ _ _ _._ _ _ _ _ __ __.._ -______ __ _ __ _ - - -_..__ __ _ _ -.__._ ____ a.o _ _ s.o _.__ _ _ __ _ __ - _ _ _ ._ ._ r cv 2.0 .... _ . -- s O 0.0 ._,.. - . _ _ _ ~ _ _. . --..._ . . - -..-. _. _ ... .__. - _ _ r . ~ ~, „i ~ ~ '- ,~ ~ ~ :~~ ;..: o _ _ . _ - -. -z.o ! 40 _ -- ;_ . _ _ _. _ _ -8.0 _.. -. _._ __ __ _ _ ...__.. __. Y ~A (O 1~ m O O N c7 ~ ~ l0 1~ m Q1 O .- N c7 < in !D I+ m O O N M ~ Ni l0 t~ aD ~ ~ ~ ~ r- r~ m oQ a~ oQ m m m m ao m rn rn rn rn rn rn a+ rn m rn o 0 0 o a o 0 0 0 C C C C C C C C C C C C C C C C C C C C C C C C C C C C C C L C C C C l0 N t0 c0 R c0 (O /O l0 t0 R f6 ~C l0 f0 f0 /0 f0 16 l0 R lC fO lC A l0 W W l0 f0 f0 W f0 l9 10 Recession ~curce. 4=loricia Agency for Workforc~:,> InnnvaUon. Labor fVlarket Statistics Center, Loca! Area Une:~i~{~~oyn~tc;nt Statistics Pn ~n coc;i~eratie~n v~~itt'i t!'~c U.S t~~r)ct~~tr~l~~i~[ o't Laiaor. E3urE:3u of Labc~i St:3tistirs F'reaared August ~ ~. 2UOII Florida's Net Migration History 1950 -2010 Yearly Decades Net Mi ration 1950 163,438 1960 136,933 1970 274,305 1980 273,829 1990 261,253 2000 235,090 Average 224,141 (1) From 1950 to 2010 net migration generated 1 million increase in Florida's population on average every 4 years (2) In FY 2003-04 net migration was growing at a rate of 1 million increase in Florida's popu lation every 2 years 7 months (3) In FY 2008-09 net migration was growing at a rate of 1 million increase in Florida's population every 236 years Last 10 ears Net Mi ration 2000-01 299,519 2001-02 316, 503 2002-03 374,210 2003-04 390,032 2004-05 352,001 2005-06 362,200 2006-07 209,240 2007-08 28,606 2008-09 4,234 2009-10 14,353 Florida's Net Migration History Compared to National Business Cycles 1950 -2010 Net Net Net Net ~n:,,.-,«:,,., en :.,.oHnn 83 Minratinn Minration 10 mon 1950-51 129,582 1955-56 241,591 110 mon 1960-61 115,506 1965-66 137,457 1951-52 133,358 1956-57 262,508 #2 1961-62 117,511 1966-07 146,737 1953-54 143, 350 1958-59 111, 289 1963-64 124,895 1968-69 158, 271 1954-55 187,618 1959-60 125,602 1964-65 95,882 1969-70 194,141 Avera e 139,922 Avera a 186,954 Avera a 115,330 Avera a 158,536 #4 11 mon Net Net Net Net M;nr-~44nn Min rafinn fts Migration Mia ration #5 I 16 mon 1970-71 328,108 1975-76 117,261 16 mon 1980-81 346,977 1985-86 292,125 1971-72 417,277 1976-77 173,239 16 mon 1981-82 241,203 1986-87 296,711 1972-73 451,588 1977-78 233,787 #7 1982-83 221,332 1987-88 276,745 1973-74 330,714 1978-79 273,321 1983-84 277,843 1988-89 257,091 1974-75 119.167 1979-80 298,583 1984-85 296,949 1989-90 231,317 Averac a 329,371 Avera a 219,238 Avera a 276,861 Avera a 270,798 Net Net Net Net *Q nn~„rari,,.. Minratinn #9 Mia ration 6hiaration 8 mon 1990-91 240,515 1995-96 258,493 ~ 8 mon 2000-01 299,519 ~ 2005-06 „3,200 1991-92 174,188 1992-93 202,104 458 1993-94 267 1996-97 271,259 1997-98 263.107 1998-99 331,687 2001-02 316,503 2002-03 374,210 2003-04 390,032 "?006-07 209,240 2007-08 28,606 1008-09 4,234 #10 12 Z7 , 1994-95 248,722 1999-00 354,998 2004-05 352,001 :?009-10 14,353 Avera a 226,597 Avera e 295,909 Averac e 341;.453 Avera a 123,727 Since 1950 the US has experienced 10 recessions includng the current one. The average recession lasted 10.3 months Indicated downturns in net in-migration Indicate significant upturns in net in-migration Florida Housing Statewide Existing Home Sales & Starts V 4i --r SL' -' I~ Sr O~ - r'1 (~ i 4 i ~r O: __'~_ R Q O+ .T~ ^ O N Q N O N -r N O N ~ ~ ~ N Existi n Home Sales g Year Over Year Existing Home Sales (% Change) 40gb 30°ib ?0% 109b 0°!0 -IOg6 -30°h -3046 -40gb -50°6 r v ~ ~ ~ a'~ ~ ~ ~ ~~~ ~3~ ~ ~~ ~ ~ ~ ~ ~~ . 'a~ ~~ ~ P eQ`g O` ~o,~ 0~~ 5 -.-2UU5 r- 2UOb QUO? -20U8 2005 2006 2007 2008 January 10% -19% -27% -28% February 6% -20% -23°!0 -25% March 6% -22% -28% -26% April 3% -31 % -26% -9% May 7% -24% -34% -5% June -3% -29% -30% -5% July $% -33% -24% 0% August 4% -34% -26% -4% September 33% -34% -38% 24% October -5% -22% -29% ~ .- ~ e, ' _~ November 1 % -30% -30% ,; _ 1 December -15% -28% -31 Overhang Drives Prices • Nation as a whole has experienced an actual drop in home prices, defying pundits. • Historic relationships are out of balance - to rents and to starts and sales. • Foreclosures and delinquencies are increasing, further swelling the supply and depressing prices. • Inventories of unsold homes suggest that prices will continue to fall through much of 2009, bringing the total reduction in house prices nationally to around 25 percent -more in Florida (June '06 to September `08 - 32.1 % down in median price for existing homes). _. ;~. ~~ ~ ~__ Sentiment is Eroding Consumer sentiment can be a leading indicator of recession: nationally, it is near the lowest levels ever obtained (57.6 in October versus 51.7 in May 1980). Florida consumer confidence has risen slightly (August: 67) from a record low (59) in June, but it is still barely above the previous record low (63). Seven Drags on Estimates * Slower Population Growth (~~~~~-~~ 11/07, ~~~~~~:~~~~ 8/08) * Loss of Wealth Effect from Declining Home Prices (8/07) * Loss of Wealth Effect from Stock Market Crash (11/08) * Growing Home Inventory (:.~~50~~~~~.a~ 11/07, ~~artial 8/08) * Spreading Credit Crunch (~a,x:: k a.:~ 3/08, ~~~~ia~ 8/08) * Elevated Energy and Food Prices (~_~~~~~~~~~~ 3/08, ~~~rti~l 8/08)I * Nation in Recession (11/08) 11% 4% 1% 6% ~.,, ~~~s.. . 7% L% Sales and Use ~ ~ Corporation Income ~ Documentary Stamp ~ Estate ^ Intangibles Other Taxes and Fees General Revenue Fund FY 08-09 __. Intangibles Other Taxes and Fees Components of Sales Tax F y 88-89 to Fy 10-11 Total Nondurables (Mall Touism 8 Rec Auto & Acc Other Durable Buildin Invest Business Investment $mil °~ Ch $mil % Ch $mil % Ch $mil % Ch $mil % Ch $mil % Ch $mil % Ch 1988-89 633.3 7 18.7% 2,334.9 19.5°10 1.512.7 21.7 1,377.8 16.1 503.8 16.30% 582.5 21.6 1.321.7 16.4 1989-90 , 039.9 8 5.3% 2,496.4 6.9% 1,644.8 8.7% 1,381.3 0.3% 532.9 5.8% 563.4 1.415.0 7.1 1990-91 , 042.2 8 0.0% 2,580.6 3.4% 1,710.7 4.0% 1,296.0 519.7 486.5 1,448.9 2.4% 1991-92 , 8.229.6 2.3% 2,678.9 3.8% 1, 779.3 4.0% 1, 337.3 3.2% 523.8 0.8% 453.7 1.456.7 0.5% 1992-93 262.1 9 12.5% 2,966.8 10.7% 1,926.7 8.3% 1,586.4 18.6% 605.5 15.6% 434.4 ~ . 1.642.3 12.7% 1993-94 , 882.1 9 6.7% 3,134.7 5.7% 1,969.1 2.2% 1,739.7 9.7% 670.2 10.7% 589.1 35.6% 1,779.3 8.3% 1994-95 , 526.6 10 6.5°~ 3,344.4 6.7% 2,072.9 5.3% 1,874.7 7.8% 725.8 8.3% 622.1 5.6% 1,886.7 6.0% 1995-96 , 319.1 11 7.5% 3,582.6 7.1 % 2,222.4 7.2% 2,065.6 10.2% 789.1 8.7% 654.7 5.2% 2,004.7 6.3% 1996-97 , 11,948.9 5.6% 3,812.8 6.4% 2,361.3 6.3% 2.098.5 1.6% 861.1 9.1 % 694.6 6.1 % 2,120, 5 5.8% 1997-98 795.1 12 7.1% 4,033.9 5.8% 2,508.8 6.2% 2,319.6 10.5% 941.1 9.3% 745.5 7.3% 2,246.2 5.9% 1998-99 , 767.1 13 7.6% 4,219.4 4.6% 2,673.2 6.6% 2,520.1 8.6% 1.100.2 16.9% 838.5 12.5% 2,415.7 7.5% 1999-00 , 14 949.2 8.6% 4,515.3 7.0% 2,910.6 8.9% 2.778.5 10.3% 1,218.9 10.8% 926.2 10.5% 2.599.7 7.6% 2000-01 , 717.2 15 5.1 % 4,853.9 7.5% 3,050.3 4.8% 2,890.3 4.0% 1,270.2 4.2% 961.7 3.8% 2,690.8 3.5% 2001-02 , 473.5 15 ~ 4,434.7 2,971.0 3,118.4 7.9% 1,236.7 952.2 2,760.6 2.6% 2002-03 , 534.5 15 0.4% 4,287.3 2,995.8 0.8% 3,133.9 0.5% 1,245.8 0-7% 1,048.9 10.2% 2.822.9 2.3% 2003-04 , 952.8 16 9.1% 4,675.7 91% 3,224.5 7.6% 3,349.6 6.9% 1,375.5 10.4% 1,103.5 5.2% 3,223.9 14.2% 2004-05 , 863.6 18 11.3% 5,099.0 91% 3,517.3 9.1% 3,607.6 7.7% 1,538.9 11.9% 1,367.4 23.9% 3,733.4 15.8% 2005-06 , 785.9 20 10.2% 5,616.7 10.2% 3,782.7 7.5% 3,879.9 7 5% 1,716.8 11.6% 1,5864 16.0% 4,203.4 12.6% 2006-07 , 20,869.8 0.4% 5,911.6 5.3% 3,488.8 3.739.3 1,664.6 1,419.7 4,245.8 10`° 2007-08 699.5 19 5,909.8 0.0% 3,932.6 12.7% 3,282.3 1,456.9 1,215.0 ~ 3,902.9 2008-09 , 087 7 19 5,777 0 3.965.8 0 8% 3.100.1 1 .365.5 1,081.5 3,797.8 2009-10 , 18$.7 20 5.8% 6,086.5 5.4% 4.168.5 5.1 % 3,296.5 6.3% 1.463.7 7 2% 1,133.6 4.8% 4,039.9 6 ~`~.. 2010-11 , 21,890.0 8.4% 6,543.1 7.5% 4,474.4 7.3% 3,532.9 7.2% 1,634.4 11,7% 1,317.6 16.2% 4,387.6 8.6% Total 100% 30.1 % 20.6% 16.3% 7.3% 5.6% 20.0% 12% 2% 4% : ~ . 6% 9% _,~ 13% 15% +~ Non-Durables 23°/O :~; Tourism & Recreation Business Investment Auto & Accessories Corporaton Income Durable Goods ^ Building Investment 1.6°/O Intangibles Other taxes and fees ~ Florida's GR Budget History Shrinking Revenues and Reserves Budget GR Recurring GR Stabilization Total Revenues Non Recurring Fund NR+BSF FY 05-06 $ 26,562.9 Actual $ 4,441.2 $ 1,091.2 $ 5,532.4 FY 06-07 $ 26,282.1 A~<<~:,~ ; $ 5,372.3 $ 1,248.5 $ 6,620.8 ( FY 07-08 ~ $ 27,568.5 A,>n~o~ $ 4 033.2 ~ ~ 1 353.7 ~ $ 5 386.9 FY 07-08 $ 24,159.4 Actual $ 4,033.2 $ 1,353.7 $ 5,386.9 FY 08-09 $ 25,087.2 Mar $ 1,019.9 $ 1,353.7 $ 2,373.6 FY 08-09 ~ $ 23,287.2 .:~~~, $ 200.0 $ 681.3 $ 881.3 FY 08-09 z $ 22,787.3 ~~~~ $ - $ 381.3 $ 381.3 FY 09-10 $ 24,654.5 ..~,,, $ 109.4 $ 681.3 $ 790.7 FY 09-10 z $ 23,654.5 ~~~: $ 109.4 $ 381.3 $ 490.7 1 August REC reduced the recurring GR estimate by $1.8 billion 2 Assumes the REC will reduce the recurring GR estimate by $.5 billion in FY 08-09 and $1 billion in FY 09-10 GR Recurring Expenditure History Millions GR Recurring Acutal Ex 05-06 $ 23,700.4 Actual Ex 06-07 $ 25,480.2 Approp 07-08 $ 27,568.5 Cumulative Est Ex 07-08 $ 26, 306.7 :~~ (1, 26 ~ . ~ ~-=~~ .6% Approp 08-09 $ 24,973.8 ~ (2,594.7) -9.4% Holdback 08-09 $ 24,178.5 $ (3,390.0 --~~~ 3.3/0 Rec Rev 09-10 $ 24, 654.5 Reductions Scenario ~~iq ~~ - August Revenue Shortfall Balanced $200 reserve Scenario ~~B ~~ -Nov. Revenue Shortfall $500m ' $1,000m Non Non Recurring Recurring Total Recurring Recurring Total FY 08-09 FY 08-09 GR Funds Available $ 23,287.3 $ 1,019.9 $ 24,307.2 GR Funds Available $ 22,787.3 $ 1,019.9 $ 23,807.2 Add Budget Stabiltzation $ - $ 672.4 $ 672.4 Add: Budget Stabilization $ - $ 672.4 $ 672.4 Total Funds Available $ 23,287.3 $ 1,692.3 $ 24,979.6 Total Funds Available $ 22,787.3 $ 1,692.3 $ 24,479.6 GR Appropriations $ 24,973.8 $ 801.2 $ 25,775.0 GR Appropriations $ 24,973.8 $ 801.2 $ 25,775.0 t_ess Budget Reductions $ (795 3) $ - $ (795.3) Less: Budget Reductions $ (795.3) $ - $ (795.3) Estimated Expenditures $ 24,178.5 $ 801.2 $ 24,979.7 Estimated Expenditures $ 24,178.5 $ 801.2 $ 24,979.7 $ (891.2) $ 891 2 $ - Total Deficit $ (1,391.2) $ 891.2 $ (500.0) FY 09-10 FY 09-10 GR Revenue Estimates $ 24,654.5 $ 109.4 $ 24,763.9 GR Revenue Estimates $ 23,654.5 $ 109.4 $ 23,763.9 IGR Expenditure Base $ (24,178.5) $ - $ (24,178.5) GR Expenditure Base $ (24,178.5) $ - $ (24,178.5) Reserve $200 $ (90.6) $ (109.4) $ (200.0) Reserve $200 $ (90.6) $ (109.4) $ (200.0) Total Surr~lus Availa ble :~ 385 4 $ - $ 385.4 Total Deficit $ (614.6) $ - _ $ (614.6) Official Forecast -August REC estimating conference adjusted for: (a) Transfer half of the Budget Stabilization Fund - $672.4 (b) Anticipated $795.3m in recurring budget cuts from the Governor's 1 % quarter reserve. FY08-09 - $500m Revenue Shortfall and Budget Deficit. Balance with Budget Cuts, Budget Stabilizaton Funds, or Chiles Endowment FY09-10 - $1,000m Revenue Shortfall and $639.9m Budget Deficit Growing Budget Shortfall for FY 09-10 GR Recurring Appropriation FY 08-09 $ 24, 973.8 Holdbacks est FY 08-09 $ 795.3) - 3.2 % Appropriation Base $ 24,178.5 Revenue Est FY 09-io $ 24,654.5 Shortfall Est FY 09-10 ~~ ;ooo.o~ Recurring GR $ 23,654.5 Budget Shortfall Critical Needs High Priority Issues Total Shortfall $ (614.6) $ (637.8) ~ (1,206.0) -, ~ ~ ~, - 9.8 ~~-~ Critical & High Priority Issues Non Critical Needs Re curring Recurring Total 1. Annualizations $ 173.7 $ 37.8 $ 211.5 2, Medicaid Conference $ 221.6 $ - $ 221.6 3. Kid Care Enrollment $ 19.9 $ - $ 19.9 4. Pre-K workload $ 26.1 $ - $ 26.1 5.. FEFP class size $ 45.8 $ - $ 45.8 6. Prison Population $ 84.1 $ - $ 84.1 7. Employer Paid Benefits $ 66.6 $ - $ 66.6 8. Bright Futures $ - $ 50.5 $ 50.5 9. Judicial Due Process $ - $ 39.9 $ 39.9 10. Prison site Acquisition $ - $ 346.5 $ 346.5 11. Constrained co~~ees ~~~ $ - $ 6.6 $ 6.6 12. Constrained co. pax caP $ - $ 26.2 $ 26.2 13. State Disaster Funding $ - $ 22.9 $ 22.9 Total Critical Needs $ 637.8 $ 530.4 $ 1,168.2 Non High Priority needs Recurring Recurring Total 1. Medically Needy $ 150.8 $ - $ 150 2. Meds AD $ 142.0 $ - $ 142 ;! 3. Low income Pool $ - $ 25.0 $ 25 ~: 4. State Pay Raise $ 160.3 $ - $ 160 :_: 5. Disabled, Health & Family $ 74.4 $ 21.0 $ a 95 •, 6 FEFP Syr av per puple gwtl $ 453.6 $ 16.0 $ 469.6 7. Public School Others $ 37.9 $ 15.5 $ 53.4 8. State Universities $ 100.6 $ 81.9 $ 182.5 9. Community Colleges $ 49.6 $ 60.0 $ 109.6 10. Other education $ 10.2 $ - $ 10.2 11. Criminal Justice/Judiciary $ 26.6 $ - $ 26.6 12. Energy Initiatives $ - $ 62.4 $ 62 •, 13. Agricultural & Environment $ _ $ 132.0 $ 1320 14.Economic Development $ - $ 121.30 $ 121.3 15. Other General Gov $ - $ 100.8 $ 100.5 16. Other Capital Outlay $ - $ 63.8 $ 63.5 Total High Priority $1,206.0 $ 699.7 $ 1,905.;