Will recovery from Irma be a boon or a bust for Florida’s state budget?

The full magnitude of Hurricane Irma’s effect on Florida is just starting to come into focus, and the state’s top economist says the monster storm, like its predecessors, will have a negative impact on the state’s revenue picture.

Amy Baker, director of the state Bureau of Economic and Demographic Research, is scheduled to brief legislators on the storm’s potential economic impacts Friday at the Capitol.

Baker’s draft report on Florida’s long-term economic outlook, prepared long before Irma struck, cites the costs of past hurricanes.

“Popular belief has spread the misconception that hurricanes are somehow beneficial to the state from an economic perspective. However, the reality is much more complicated,” Baker’s draft report says. “Contrary to the oft-repeated myth that government makes money during hurricanes, state government typically has expenditures greater than the incremental increase in the revenue estimate and becomes a net loser when all expenditures are taken into account.”

Baker says hurricanes also have huge impacts on state debt as well.

Contrary to the oft-repeated myth that government makes money during hurricanes, state government typically … becomes a net loser when all expenditures are taken into account.

Draft report from Amy Baker, director of the state Bureau of Economic and Demographic Research

The last major storm that hit Florida was Wilma in 2005. Due to term limits, most of the members of the current Legislature were not in office.

They are not fully familiar with the potential fiscal, economic and political repercussions of Hurricane Irma on the state.

Baker notes that Florida typically has four distinct phases of hurricane activity, each with unique impacts on the state economy.

The phases are: preparatory, crisis, recovery and displacement.

In calculating a storm’s economic impact on the state budget, economists use recovery-related budget expenses, and that doesn’t show the full picture.

It excludes a lot of other expenses, like the program of bridge loans that Gov. Rick Scott announced Thursday.

It also does not include the impact on cities and counties, which in parts of the state will be massive.

Taken together, the four major storms of 2004 (Charley, Frances, Ivan and Jeanne) produced $752 million in added revenue and carried $791 million of added expenses.

The gap was much wider for the four hurricanes of 2005 (Dennis, Katrina, Rita and Wilma).

The 2005 storms produced $422 million in added revenue and cost $625 million, Baker’s office reported.