Federal sequestration cuts loom over state budget
On Friday, $85 billion in federal spending will be cut if President Obama and Congress can’t reach a deal to stave off the “sequestration” cuts. The cuts would have a broad impact nationally and would hit Florida’s economy hard, throwing off current revenue projections from state economists. Gov. Rick Scott’s office cites a study from the Center for Regional Analysis, a Washington public policy research group, predicting 40,000 jobs lost and a $3.35 billion reduction in gross state product. A release from the White House emphasizes cuts to social programs such as early learning, vaccines for children and unemployment assistance. The Federal Aviation Administration released its plan to handle the cuts this past Friday, which would trigger 90-minute delays for flights to large airports such as those servicing New York and Chicago. State economists have predicted a surplus of $436.8 million for the 2013-2014 fiscal year -- the first projected surplus in three years -- without taking into account the federal cuts. Amy Baker, the state’s chief economist said the paring of defense spending would cost the state jobs from the federal government and private defense contractors, and take more than $2.7 billion out of Florida’s economy. “Obviously the biggest hit is directly to the economy. We have a lot of defense contractors in Florida, a lot of government contracts,” Baker said. Even if the Friday deadline comes without a deal, Congress and President Obama could still pass legislation within the next month to avert the cuts before the effects are felt by federal agencies. The high drama, though, is already causing consternation among Florida’s elected officials, who must craft a budget amid federal fiscal uncertainty.
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