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October 7, 2022

Florida prepared if U.S. heads into recession

Gov. Ron DeSantis, when suggesting President Joe Biden’s economic policies will “plunge the United States into a recession,” says Florida will be prepared.

At a news conference this week announcing funding for flood control and water management projects in Lee County, he said that while inflation continues to worsen, Florida’s economy is strong, with revenue exceeding expectations.

“For the month of April, it’s our current estimate that the state of Florida brought in about $760 million above estimate,” he said. “We consistently have been over-performing that. That means that the fiscal surplus for fiscal 21-22 is going to be by far the biggest surplus in the state. By the time the fiscal year ends June 30th, we’ll have well over $20 billion in surplus between the unallocated general revenue fund balances and our budget stabilization fund.”

“That’s what you call being a good steward of people’s money,” he added. “We’re built for the long haul. We have no income tax, very low tax burden. There’s nothing in the foreseeable future that would change that trajectory. It’s important that we govern that way because I think it’s very likely that Biden is going to plunge this country into a recession.”

He pointed to several indicators like inflation, the Fed raising interest rates and market fluctuations, saying, “there’s a lot of concern about the overall economy.”

“Florida’s been doing well, and we’re happy about that, but when you have the inflation headwinds, when you have the Fed raising interest rates, when you have some of the other things happening in the markets, there is a possibility of a downturn and unfortunately that downturn will have been precipitated by a lot of really bad policies coming out of Washington, D.C.,” DeSantis said.

While he hopes that doesn’t happen, he said, “prudent statesmanship is to be prepared in case something like that does happen.”

“We are happy with our fiscal situation,” he added. If a national economic downturn does occur, he said, “We have the reserves ready. We would not miss a beat in terms of meeting our priorities for education, infrastructure, water resources, all these things that are part of our mission to make Florida a great state to live.”

The Bureau of Labor Statistics’ March Consumer Price Index reported an 8.5% increase in inflation from the previous year, the highest in 40 years.

Last month, state Chief Financial Officer Jimmy Patronis said in a statement the inflation report was “alarming.”

“Unfortunately, with food costs up nearly 9 percent and energy costs up over 30 percent, there is no end in sight and still no plan from Washington and the Biden Administration,” Patronis said.

However, “With gas tax cuts and our home hardening initiative,” he said the governor and legislature “have done more to fight increasing costs on households than anything Washington has done.”

One way Florida can weather an economic downturn, he said, is for DeSantis to veto expenditures in the budget. “His veto pen will be an important tool in protecting critical services for hard times – and I hope he uses it,” he said.

DeSantis has already announced that he was going through the budget line by line to exercise his line-item veto authority. The funding for projects he’s been announcing are those he’s already approved in the budget, he said.

He hasn’t yet announced any line-item vetoes and hasn’t yet signed the budget.

This article was originally posted on Florida prepared if U.S. heads into recession