Florida economists knew January’s revenue forecasts would fall short after the COVID-19 emergency emerged in March to skewer all projections.
The Office of Economic and Demographic Research (OEDR) April revenues report exceeded all fears, however, documenting that Florida collected $878 million – or more than 33 percent – less last month than anticipated.
State economists had forecast Florida would collect $2.984 billion in sales taxes, corporate taxes, fees and other revenues in April. The state actually collected $2.106 billion.
Since collections exceeded projections by $202 million between January and March, before the COVID-19 emergency put much of the state’s economy on ice, the total deficit between forecasts and collections was $675.7 million, OEDR said.
What this means for Florida’s $93.2 billion fiscal year 2021 budget, approved in March but still awaiting Gov. Ron DeSantis’ signature, is uncertain. Lawmakers used January’s revenue projections to build the spending plan, which goes into effect July 1.
Senate President Bill Galvano, R-Bradenton, said how the state proceeds – in a special session or by DeSantis vetoing some fiscal 2021 spending – will depend on whether the $4.6 billion Florida has been allocated through federal COVID-19 assistance packages can be used for budget stabilization.
“Recognizing the possibility that ultimately the state may not be able to directly use stabilization funds for this purpose, I have concurrently been working with appropriations staff to determine all of the permissible uses of this funding to best position Florida to fully recover from the impacts of COVID-19,” Galvano said Tuesday.
Florida TaxWatch (FTW), a nonprofit taxpayer research institute based in Tallahassee, said the revenue shortfall exposes the need for lawmakers to take care of unfinished business.
FTW reiterated Tuesday its April 14 call for the Legislature to adopt an "E-Fairness" bill that could generate up to $700 million a year and to secure a renewed gaming compact with the Seminoles that could generate another $700 million annually.
Florida is the only state that has not changed online sales tax collection laws after the June 2018 U.S. Supreme Court ruling in South Dakota v. Wayfair, which allows states to compel out-of-state remote sellers to remit sales taxes.
Sen. Joe Gruters, R-Sarasota, the state GOP chairman, sponsored Senate Bill 126 during the 2020 session. It proposed mandating online retailers that sell at least 200 items, or $100,000 worth of goods, to Floridians to collect and remit the state’s 6 percent sales tax. The bill died in the Senate Appropriations Committee.
The Seminoles stopped making $350 million in annual payments when their pact expired last May after lawmakers and the Tribe failed to reach an accord over banked card games, control of online gaming and discord over sports gambling.
House and Senate leaders confirmed in mid-March they were near securing a compact that could garner up to $700 million annually by allowing the Tribe to add craps and roulette to slot machines and banked card games, such as blackjack.
“We cannot afford continued inaction on these critical issues,” FTW President and CEO Dominic Calabro said Tuesday. “Today, we again urge the Florida Legislature to take decisive action and activate these needed revenue sources.”
In total, sales tax collections were down $598 million – 24 percent below estimates – mostly attributable to the shutdown of the state’s tourism and hospitality industries.
According to a 2016 VISIT FLORIDA study, tourism spending generated more than $7.6 billion in sales taxes, with “indirect” tourism-related activity contributing another $3.6 billion, accounting for one-third of the state’s $32 billion general fund.
Corporate income taxes registered $246 million below April estimates. Highway safety fees from vehicle sales were $20 million short, and corporate filing fee revenues were nearly $57 million below April estimates.