Legislative Budget Commission adopts long‑range financial outlook showing near‑term surplus, multi‑year shortfalls

The Legislative Budget Commission adopted the Office of Economic and Demographic Research's long‑range financial outlook after a presentation by Amy Baker, coordinator of EDR. Baker told members the document is "a constitutionally required document" and is the 19th edition produced with input from state agencies and the estimating conferences.

The outlook shows a positive first‑year balance but growing shortfalls in later years. Baker said the first year ends with a projected surplus of about $3.7 billion, but that roughly 70% of that surplus is nonrecurring. On the projection horizon the commission was shown a deficit of $1.5 billion in the second year and about $6.6 billion in the third year if spending growth continues at recent rates.

Why it matters: the outlook informs budget writing and highlights decisions about timing and whether to address structural shortfalls now or defer them. Baker told members that delaying corrective action would increase the magnitude of future adjustments and said, "we still need to reevaluate, reconsider and readdress those fiscal strategies." Representative Sarah Boyd moved to authorize staff to make technical and conforming changes; Senator Pasadoma moved to adopt the outlook. Both measures were adopted by voice vote.

Key fiscal drivers and reserves: Baker said legislative actions after the 2025 session increased the balance forward into the current year by about $5.7 billion through a mix of released contingencies and forced reversions. She noted an estimated current‑year Medicaid services shortfall of roughly $125 million. Unallocated general revenue was shown near $9.3 billion; the Budget Stabilization Fund is roughly $4.9 billion and at its constitutional maximum; and the Emergency Preparedness and Response Fund is expected to hold about $840 million once transfers complete. Total reserves were reported at nearly $15 billion, roughly 29.7% of the general revenue estimate.

Demographics, wages and housing: Baker summarized the economic assumptions behind the outlook. Florida GDP growth was presented in the 1.9%–2.0% range over the near term, modestly below the state's long‑run average. Wages have been a persistent upward pressure: she said Florida's average annual wage rose to about 91.9% of the national average and that wage growth is expected to remain strong, which will push budget pressure where roughly 12.6% of the budget is labor related. Population growth to 2030 was projected at about 1.23% overall, with net migration (not natural increase) driving growth and the 65+ population rising to an estimated 24.7% of the state by 2030.

Risk assessment and "black swans": EDR presented a hurricane loss normalization using the Great Miami Hurricane of 1926 as a historical analog. After adjusting for population, property value growth and building‑code changes, EDR estimated the state fiscal exposure from a similarly scaled event at roughly $3.4 billion to $3.8 billion in state costs; Baker said the state could manage a single event from existing reserves but co‑occurring or back‑to‑back events would exceed the Budget Stabilization Fund.

Questions and follow‑up: Representative Allison Tann asked whether the influx of seniors corresponded to changes in the younger population and local school enrollments. Baker replied that the youngest cohorts are still growing in absolute numbers but their share of the population is declining (EDR cited the under‑18 share falling from about 22.8% in an earlier period to about 19.5% in 2020 and projected about 19.2% by 2030), which creates labor‑market stresses as prime‑age workers face greater combined dependent care responsibilities.

Outlook for policymakers: Baker emphasized that while the first year contains a positive balance, much of it is nonrecurring and that the commission and Legislature must consider the timing and pace of corrective actions to avoid larger adjustments later.