Government

State Budget Sinks Florida Consumer Confidence, UF Says

Survey finds public pessimism rises with spending cuts in Tally; a disconnect with U.S.?
By: Kenric Ward | Posted: June 1, 2011 3:55 AM
Pulling money out of wallet

Credit: Shutterstock - Temych

While a national confidence index showed Americans worried about gas prices, the job market and the ongoing housing slump, University of Florida researchers say Floridians have a different concern: the state budget.

Nationally, the Conference Board’s Consumer Confidence Index fell in May to 61, the lowest reading since November and down 30 points since late 2007.

Floridians' outlook has been shaken, too. In a report also announced Tuesday, UF's Bureau of Economic and Business Research's consumer confidence rating dipped to 68, the worst since September 2010. Perceptions on personal finances compared to a year ago dropped 4 points to an anemic 52.

Consumer confidence indexes, scored on a 100-point scale, are important because consumer spending accounts for about 70 percent of U.S. economic activity.

But the 2007-2009 national recession and subsequently soaring fuel and food prices have battered household budgets. With diminished discretionary income, consumer spending on big-ticket items, including homes, has eroded.

Opinion polls show majorities of American voters want Washington to share the pain by reining in government spending through a balanced federal budget and a lower national debt ceiling. But that sentiment doesn't necessarily prevail in Florida.

BEBR director Chris McCarty said Floridians are most worried about budget cuts.

“It appears that the public is beginning to understand that budget cuts at the state level and deficit reduction at the national level will likely affect everyone in the U.S., young and old, rich and poor,” McCarty said.

Gov. Rick Scott, in proposing a $66 billion "jobs" budget, said lower state spending, accompanied by $2 billion in corporate- and property-tax cuts, would boost economic activity in Florida.

Last week, the governor signed a $69 billion budget that scaled back the tax cuts while expanding his initial spending proposal by more than $3 billion.

But media reports focused on $615 million in line-item vetoes by Scott, and those were seized on by liberal groups that decried any reductions, while generally assailing the Republican-controlled Legislature.

“Rick Scott ran on creating jobs, but instead he is running Florida’s economy into the ditch,” said Mark Ferrulo, executive director of Progress Florida.

“Since this governor has been in office, we have seen him break his promise not to cut education funding, turn down job-creating projects such as high-speed rail, and today he signs a budget that eliminates thousands of jobs," Ferrulo said shortly before the budget-signing ceremony Thursday.

Florida Watch Action, another liberal advocacy group, has launched a website, www.PinkSlipRick.com, that purports to track job losses since Scott took office.

Though the claims of eliminating "thousands of jobs" have been denied by the Scott administration and could not be confirmed by any independent analysis, the downbeat mantra has resonated in the media echo chamber and stuck in the public's mind.

“This month, there was a decline in perceptions of personal finances compared to a year ago,’’ UF's McCarty said. “We attribute most of these changes to fallout from the Florida budget.’’

In April, as the budget negotiations took center stage, McCarty detected a "sharp decrease" in consumer confidence among “seniors who are increasingly hearing deficit-reduction plans that include Medicare, and low-income households who at the state level are anticipating cuts to Medicaid and other programs.”

Noting that the fiscal 2012 budget is only 2.8 percent smaller than the current year's, other analysts suggest that consumer pessimism is driven by other concerns, notably the state's worsening housing market. See article here.

McCarty said UF's monthly consumer-confidence survey, which is timed to coincide with the Conference Board index, conducts 500 telephone interviews of Florida households via random digit dialing. Reported results are proportionate by county population, though not by party affiliation.

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Contact Kenric Ward at kward@sunshinestatenews.com or at (772) 801-5341.

Comments (5)

TadM
1:33PM JUN 1ST 2011
Didn't a BUNCH of that 615 Mil go TO schools?...
HSR equaled something like 150 permanent jobs after spending borrowed money with a bunch of strings attached and leaving the FL taxpayer holding the bag...

"Though the claims of eliminating "thousands of jobs" have been denied by the Scott administration and could not be confirmed by any independent analysis, the downbeat mantra has resonated in the media echo chamber and stuck in the public's mind."

The Libtards can cry all they want and the "media echo chamber" is just that, an echo chamber fulll of useful idiots who think the public is just as blind and stupid as they are. Scott and the FL legislature balanced the budget with not only no tax increases but even a few tax cuts.
Atta Boy, Rick!
sherry
8:16AM JUN 1ST 2011
The writer appears to live in the same bubble that the government does.

And so, if Obama inherited the financial mess, why didn't Rick Scott inherit it?
Sherryl
7:45AM JUN 1ST 2011
It's interesting that everyone wants the government to stop spending so much, balance the budget, bring in the jobs, etc. However, when a governor and legislature elected on that premise begins doing just those things, the indoctrinated liberals and unions come out of the woodwork and go beserk! Anyone with common sense can see the need to do exactly what is being done with teacher merit pay, gov. employee pensions, refusing the "free" money from the feds to build a rail system bound to fail. Do not let these unbalanced people get us off course to actually get some great things done for our State. And by the way, one of the very first "entitlement" programs (both state and federal) that should be cut, saving billions, should be any money being spent at all on anyone who is not an American citizen! I don't care if someone is visiting here, lives here legally but is not yet a citizen, or is here illegally....no American tax dollars should be spent on anyone who is not an American in this country...nothing for medical, food, housing, monthly income, education, etc. We already send billions overseas continuously to other countries. Those other countries will one day have to be the next "entitlement" cuts in our spending because someone forgot to tell our government that the U.S. is broke and borrowing money....to send to other countries!
ghostrideraz
11:41AM JUN 4TH 2011
Good points. We as Floridians carry the burden for those who do not add value to our Florida. Don't get me wrong we should all ways take care of our own and everyone @some point needs help in one way or the other.
If Gov. Scott keeps the trend of making The Great State of Florida a place to be. At some point and time we as a state could revisit some of the programs to help citzens in need. Remember you may have to break a few eggs to make a omelet!
RepublicanConscience
6:12AM JUN 1ST 2011
Do you think UF might be biased? Since they get so much public funding (a.k.a. our tax dollars), do you think they are objective?

When you are feeding from the public trough you naturally get upset with budget cuts, they'll get over it.

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