Mary Ann Gosa Director of Governmental Affairs IFAS RAC Presentation October 2009

1. Mary Ann GosaDirector of Governmental Affairs IFASRAC PresentationOctober 2009

2. Thank You

3. These are truly historical times. • First time in history the budget has dropped four years in a row. • The legislature is inundated with challenges.

4. Pre-2009 Legislative Session • Budget cut by 10% ($7 billion) over the past two years and facing a $6.7 billion deficit, • Inexperienced legislature, • Term Limits - Out of 160 members, 52 were freshmen, • 49% of the legislature has served four or fewer years in their respective chamber, • Feb Special Session to cut current budget; • Speaker replaced just weeks before session began,

5. 2009 Legislative Session • No one in office had served under these conditions. • Revenues consistently came in millions of dollars under projections each quarter. • No one was sure how much we would have to cut, so the legislative clock ticked silently while everyone waited for the March numbers to come in.

6. Stimulus? • There were conflicting estimates as to how many stimulus dollars Florida would receive. • How would it have to be spent? • When would it have to be spent? • What strings would be attached? • Filling recurring $ holes with non-recurring money is dangerous and just delays the pain. • Major philosophical difference between Senate and House budgets.

7. What happened? • It took an extra week but a compromise budget was built and passed. • We shared painful cuts like everyone else, but in the end we came out better than we expected.

8. Quote from FYIFAS: “…in a year in which the state was facing a $6 billion deficit, these cuts were much less than were projected at one time. IFAS was treated fairly and not cut disproportionately to the rest of the state university system. We consider this a victory and appreciate all the efforts you made to express your support for IFAS by making yourselves heard. We feel that your phone calls and/or personal visits really turned the tide in our favor.”

9. Projections for 2010-11 Economic Indicators • Florida's economy lost ground in 2008 and is continuing to decline.  Florida ranked 48th in the country in Gross Domestic Product (GDP); this was dropped from 2nd in the country in 2005. • In April, the unemployment rate for Florida was 9.6% compared to 8.9% nationally.  January 2010 is projected to go to 10.2% in Florida. • Population growth, the state's primary engine of economic growth, fueling both employment and income growth is still slowing and expected to remain flat through 2012.

10. Projections for 2010-11 • This is the longest recession on record and is projected to last through September 2009 for a total of 22 months. • Recovery in the housing market is not anticipated to begin until the latter half of Fiscal Year 2010-11, but it is beginning to improve . • Florida is expected to lag behind the nation in recovery. It is projected that it will be 2012-13 before we begin to pull out of this. 

11. General Revenue •  Total GR funds for 2010-2011 are projected to increase $1.7B over 2009-10.    • The 3 largest budget drivers in order of magnitude are: 1) K-12 Florida Education Finance Program; 2) Medicaid; 3) Prison construction and operations.  • Providing for projected growth in those 3 areas will cost an additional $1.5B in 2010-2011.  This will leave only $200M to address all of the other needs of the State which total another $1.5B as projected in the 3-year Long Range Financial Outlook. 

12. Rule of Thumb = in typical years the financial needs in the State Budget grow by approximately $2.5B- $3B per year.   Projected growth in General Revenue funds for the next 3 years: •  2010-11: $1.7B • 2011-12: $1.2B • 2012-13: $2.0B

13. What do we do now? How do we prepare for the next couple of years?

14. One Priority • Workload Formula