State economists are projecting Florida will see a budget surplus of $3.8 billion in the upcoming fiscal year, but that financial cushion is expected to give way to sizable deficits in the years that follow. According to the latest Long-Range Financial Outlook, shortfalls of $1.5 billion in 2027-28 and $6.6 billion in 2028-29 could emerge if spending patterns from the past three years continue.
The annual outlook, which tracks state revenues and spending over a three-year horizon, credited lawmakers with helping delay the deficits by scaling back spending in the current budget cycle. This year’s budget stands at $114.6 billion after Governor Ron DeSantis issued more than $500 million in vetoes — about $2 billion less than last year’s budget. Those reductions turned what was once expected to be a $2.5 billion deficit in 2026-27 into the $3.8 billion surplus now forecast. Read More
“Strategic actions taken by the Legislature in the 2025 Session significantly improved the state’s near-term financial position relative to last year’s Outlook,” the report noted.
Still, challenges remain. Spending spikes that began during the COVID-19 years continue to drive future projections upward. Economists warn that Medicaid, K-12 schools and voucher programs, and state worker health insurance will be among the largest contributors to new costs. In addition, lawmakers have committed hundreds of millions to an emergency fund for disaster response, especially hurricane recovery.
All told, anticipated obligations are expected to add $6.8 billion in new spending over the next three years. When combined with other high-priority needs, the total reaches $20.3 billion.
The looming fiscal concerns come after months of debate in Tallahassee. House Speaker Daniel Perez, R-Miami, argued for deeper spending cuts and a reduction in the state sales tax, while Senate President Ben Albritton, R-Wauchula, favored a more moderate approach. Governor DeSantis, meanwhile, pushed for a significant property tax cut.
“The House has repeatedly said that state government has a spending problem. The long-range financial outlook reinforces that fact,” Perez said in a statement. “While we successfully fought to eliminate next year’s shortfall, we are facing a significant deficit in the out-years. The current level of spending is unsustainable and, in a state as prosperous as Florida, should be unacceptable.”
Lawmakers on the Joint Legislative Budget Commission are scheduled to review and approve the outlook on Sept. 12. The Legislature will then reconvene for its regular session on Jan. 13 to craft the next state budget.
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