TALLAHASSEE (AP) – A new estimate shows property values and the taxes they generate are dropping more than previously expected, and that will just widen a potential state budget gap, the Senate’s top budget-writer said Thursday.

State economists now are forecasting nearly a 12-percent decline in property values across Florida.

That’s expected to reduce property tax revenues the state requires local districts to put into the state’s school funding system by $840 million in the budget year starting July 1, said Senate Ways & Means Committee Chairman JD Alexander, R-Lake Wales.

Gov. Charlie Crist’s budget director, Jerry McDaniel, told the panel that $880 million in federal stimulus money the governor wants to put into the school funding system would offset the loss of that revenue without raising the property rate.

McDaniel said that scenario would keep per-student funding about where it is now at $6,860 a year, but the loss of property tax revenues would wipe out a $183 per student increase Crist has proposed. It’s part of the governor’s recommended $66.5 billion budget – about $1 billion more than is currently being spent.

Alexander, though, remained skeptical.

“I think it’s going to be very difficult just to maintain the (school) funding we have,” Alexander said.

He said he expects a gap of about $2 billion between anticipated general revenue and must-fund spending, including schools, Medicaid and prisons even if the state uses all the federal stimulus money it’s expecting – more than $13 billion spread over three budget years.

Lawmakers will have a better idea when state economists revise their general revenue estimate March 13.