FL: State Economists - Recession would hit hard

The slump in Florida's economy is worse than expected, and the state would experience disproportionate pain in a national recession, economists warned.

Florida's economy, already slumping from a depressed real estate market and a sharp decline in sales-tax collections, would be hit hard if the country slides into a recession, state economic forecasters are warning lawmakers.

Real estate markets could take longer to recover, jobs losses may be more severe, and the state budget -- reeling from the loss of $4 billion in revenue in the span of just one year -- could face even bigger cuts, forecasters said. That's because the housing market has taken a bigger hit in Florida than in other states, and the impact has spread to retail sales and sales-tax collections, said Alan Johansen, director of the Senate Finance and Tax Committee.

Among their conclusions:

• Home prices have dropped more in Florida than in most other states.

• Housing starts have fallen to two-thirds of where they were two years ago.

• Home sales have plummeted 30 percent in 17 of the 18 major metropolitan markets.

• Total state-tax collections have declined for two consecutive years, a circumstance not seen since 1970.

''The current situation looks like what we would expect with a recession,'' said Johansen, a member of the state economic forecasting team. He told the Senate Finance and Tax Committee that at present there is no recession.

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