In committee meetings on January 19 and 20, 2010, legislators began the task of addressing the potential shortfall in the state's budget for the fiscal year that begins on July 1, 2010. Current estimates are that state revenues will be $3.2 billion less than needed for a “continuation” budget that maintains programs and services at their 2009 – 2010 level, even after taking federal stimulus dollars into account.

The shortfall represents approximately five percent of the $66.5 billion budget that went into effect in July 2009. The most recent official estimate of the shortfall was $2.6 billion, but Senate Ways and Means Committee Chairman JD Alexander (R-Lake Wales) told committee members that increased Medicaid and state retirement costs would push the shortfall to more than $3 billion.

When legislators faced an even larger shortfall in the 2009 – 2010 budget, they cut spending, increased various fees and fines by a total of $2.2 billion, and used federal stimulus funds to close the gap. Similar fee increases will meet with strong opposition this year, at least in the Senate. Speaking before the Ways and Means Committee, Senate President Jeff Atwater (R-North Palm Beach) warned against any further increase in taxes or fees. Floridians, Sen. Atwater told the budget-writing panel, “do not have one more dime to send us.” Sen. Alexander said that budget cuts of three or four percent might be needed.

House leaders also have expressed their desire to balance the budget without increased taxes or fees. In an effort to identify potential cuts, House appropriations committees began an “exercise” in which members identify their spending and budget-cutting priorities. The committees are expected to begin debating budget cuts in February.