State economists left their analysis of Florida's economy unchanged Friday, pointing to a strong construction industry and booming population growth as the driving forces behind a healthy economic outlook. But, they cautioned, the pace of the state's post-recession recovery could be at or near its peak.

  • Florida economists: Healthy economic outlook, but concerns ahead
  • Pace of recovery could be at or near peak
  • $1.3 billion deficit forecast for 2018-2019 fiscal year

The findings could give state lawmakers reason for both optimism and concern. As they prepare to craft Florida's 2017-18 budget, the health of the economy figures to play prominently in discussions about what the state is able to afford.

As it is, a $1.3 billion deficit is being forecast for the 2018-19 fiscal year, which Democrats say is a direct result of years of supply-side tax cuts championed by Republican Gov. Rick Scott.

Scott is now calling on the legislature to pass $85 million worth of business incentives his team can dole out to companies that pledge to move to and expand within Florida. Given the deficit projection, the governor's proposal has been widely viewed by members of both parties as a heavy lift.

And while Friday's economic analysis was relatively rosy in the short term, it also signaled future headwinds, particularly in 2020 and beyond.

"We had really strong growth rates coming out of the Great Recession as we were getting back to normal, and then you flip to slower growth rates once you reach that point, more typical growth rates, not the extraordinary growth rates," said Amy Baker, the Florida Legislature's chief economist. "We really haven't gotten there yet."

The immediate priority, some lawmakers have suggested, should be shoring up the state's fiscal footing to avert the looming deficit. That could mean declining to fund business incentives now in order to avoid more painful measures, like cutting education funding, later.

"Hopefully we will get to a point where our economy is growing at such a rate that those projected shortfalls won't occur, but it is our responsibility to be prudent and to make sure that we are looking down the road," said Sen. Dana Young (R-Tampa).

Despite the economic uncertainty, Scott is expected to continue to press his case for the incentives as next spring's 2017 regular legislative session approaches. Earlier this year, the legislature rejected the governor's request for $250 million worth of incentives and approved only a fraction of his $1 billion tax cut package.