Florida gets another bump in tax revenues, to the tune of $442.2 million
Florida budget writers got some good news Wednesday, as general-revenue tax collections topped expectations for September by 15.7 percent, due in part to people continuing to spend down savings amassed during the COVID-19 pandemic.
But savings stockpiled since early 2020 by Floridians might be returning to a pre-pandemic normal. Meanwhile, the Federal Reserve issued a statement Wednesday indicating it will start reducing monthly bond purchases, indicating a shift in focus from trying to boost the economy to dealing with inflation.
A report released Wednesday by the Legislature’s Office of Economic & Demographic Research said general-revenue tax collections in September were $442.2 million more than had been projected in an August forecast.
The report continued a series of signs that lawmakers will be flush with cash as they draw up a budget during the legislative session that will start in January. Economists in August estimated lawmakers would have $2.6 billion more in general revenue than previously forecast this fiscal year, which started July 1, and in the 2022-2023 fiscal year.
The revenue is in addition to nearly $6 billion in unspent federal coronavirus stimulus money.
Gov. Ron DeSantis on Wednesday praised Florida’s economic and educational regulations and management as the state’s population continues to swell.
“People are voting with their feet,” DeSantis said during a campaign-style event in West Palm Beach. “They're leaving failed states, and they're trying to come to a state that's going to be well-managed and well-governed.”
Still, economists anticipate an eventual slowing, but not a reversing, of the current economic direction.
One sign of the slowing could be seen in Floridians’ personal saving rate, the percentage of disposable income that people save. The rate stood at a “below-normal” 7.5 percent in September, according to Wednesday’s report. The rate was 7.9 percent during the 2018-2019 fiscal year.
During the pandemic, as people limited movement and spending, the saving rate hit a record 33.7 percent in April 2020. In July, the figure stood at 9.6 percent.
The report pointed to sales taxes and corporate-income taxes for the September gains in revenue.
“September collections reflect activity that largely occurred in August, which continued to benefit from the most recent round of stimulus checks to households, redirected spending from the hard-hit service sector and some consumers’ ability to draw down atypically large savings that built up during the pandemic,” the report said.
The report said revenue from sales taxes, after adjustments, was $200.6 million, or 10.3 percent, higher than forecast for the month.
The overall general-revenue total of $3.251 billion for September marked the 14th consecutive month in which the state exceeded forecast numbers. General revenue had been forecast at $2.809 billion for the month.
General-revenue taxes play a key role in funding programs such as schools, health care and prisons. DeSantis is expected to release a budget proposal in the coming weeks that will serve as a starting point as lawmakers move into the legislative session.