TRG | The Bottom Line - 4/28

SpaceX should have launched from Florida where the company has a 100% success rate thus far in 2023. Instead, the Starship, 2x more powerful than the Saturn 5 that rocketed humans to the moon, launched from Boca Chica Beach in Texas and suffered a Rapid Unscheduled Disassembly, or RUD, approximately four minutes after takeoff. In other words, it exploded (rain check on that Mars ticket). As TRG wrote earlier this week, Florida’s DOT budget is also exploding. Contacts share they expect a FY’24 budget of $14.6B, at a minimum, vs. $12.6B last year. FL ended FY’22 with revenue surplus of $21.8B, “the highest in state history and more than 21% above the state budget for the fiscal year.” The economy has not slowed down, a similar theme from another state TRG has written about - Texas. While most states budgeted a 2-3% revenue decline in FY’23, Florida revenue collections are surpassing both previous year totals and current year estimates. Through February, net revenues are 11.3% above estimates and $2.2B over FY’22. A continuation of a secular trend that has been in the works since the Great Recession, states are becoming less reliant on Federal funding. Federal funding now contributes ~25% of FDOT funding, down from ~33% a decade ago. Given less reliance on Fed dollars, IIJA funding will not provide a spike in lettings/expenditures but will provide a more robust program.