After a contentious legislative session this year that required overtime to hammer out a budget, Florida lawmakers could again face decisions about limiting spending during the 2026 session.
“Our work is not done,” House Budget Chairman Lawrence McClure, R-Dover, said Friday after a joint House and Senate panel received an overview of the state’s long-range financial outlook from economist Amy Baker, coordinator of the Legislature’s Office of Economic & Demographic Research.
“I intend for the House to dig even deeper this (upcoming) year for efficiencies, find waste and ineffective programs,” McClure said.
The economic forecast showed a $3.8 billion surplus for the 2026-2027 fiscal year. But without altering current levels of spending, shortfalls are anticipated of $1.5 billion and $6.6 billion in subsequent years.
McClure pointed to health care and education, which are the largest parts of the budget, as areas where lawmakers could face spending decisions.
“You're going to instinctively be looking in those areas just as a function of their volume,” McClure told reporters after the Joint Legislative Budget Commission meeting. “But I think the good news here is, unlike maybe an ‘08, where you had to have a true reduction off of previous year appropriations, this is easily solved by just not spending as much of the new money.”
Faced with a similar outlook heading into the 2025 session, the House and Senate battled on spending levels and tax cuts. The session was scheduled to end May 1 but lasted until June 17, when lawmakers passed a $115.1 billion budget.
The House had proposed a $112.95 billion budget, while the Senate’s proposal weighed in at $117.36 billion.
Heading into the 2026 session, which will begin in January, one of the key topics will be Gov. Ron DeSantis’ push to cut or eliminate homestead property taxes. A House select committee is scheduled to meet Sept. 22 and Sept. 23 to look at the issue.
“I don't want to speak on behalf of the chairs of that committee, but I think the intent of that is it's something that we hear from our constituency, right? Let's explore it and then put some options on the table that seem to make the most sense,” McClure said.
State agencies already are looking at the possibility of a tight budget next year.
“I believe you're going to continue to see the Legislature, as well as our governor and the governor's recommended budget, tighten up the budget in order to deal with the emerging economic circumstances that we're facing,” state university system Chancellor Ray Rodrigues told the system’s Board of Governors during a meeting Thursday in Sarasota.
Baker’s presentation Friday to the Joint Legislative Budget Commission highlighted four areas --- an emergency preparedness and response fund, the Medicaid program, the main school funding program and state employee benefits --- that are expected to collectively increase in costs by $2.572 billion next fiscal year and $6.779 billion over three years.
Baker’s presentation to the commission also cited economic and demographic issues facing the state. She said existing single-family home sale prices are “starting to come down a little bit,” consumer sentiment is down and retiring Baby Boomers will continue to increase as a percentage of the population.
Meanwhile, the prime working-age population, people between 25 and 54, will slip from 36.8 percent in 2020 to 36.2 percent by 2030.
The report also noted that wages in Florida have increased, from 87.3 percent of the national average in 2020 to 91.9 percent, a trend Baker said is expected to continue.