Florida anticipates $2.77 billion increase in General Revenue over two years

by | Aug 21, 2023

  • During the General Revenue Estimating Conference on Friday, state economists forecasted a $2.77 billion surge in Florida’s general revenue projections across the next two fiscal years.
  • Despite ongoing economic challenges, actual revenue collections exceeded expectations by totaling $1.08 billion across all sources, representing a 2.3 percent increase.
  • Sales tax gains for general revenue are expected to reach $907.6 million in FY 2023-24 and $615.1 million in FY 2024-25, with all six sales tax categories poised for growth.

During Friday’s estimating conference, state economists projected a $2.77 billion increase in Florida’s general revenue projections for the next two fiscal years.

Despite ongoing economic challenges marked by shifts in increased credit utilization, evolving spending patterns, and inflationary pressures, actual revenue collections exceeded expectations compared to the previous conference, totaling $1.08 billion across all sources and representing a 2.3 percent increase.

Anticipated gains from sales tax for general revenue are projected to reach $907.6 million in Fiscal Year 2023-24 and $615.1 million in FY 2024-25. All six categories of sales tax are poised to experience upswings in both fiscal years, though concerns include the potential normalization of consumer purchasing habits, potential debt accumulation, and the challenge of managing budgets amid heightened inflation, per the economists.

The forecasts exhibited only marginal deviations from those agreed upon in February, however, the earlier forecast factored in a mild recession during the first and second quarters of this year, which the conference on Friday stated did not transpire.

After absorbing the impact of $1.02 billion in tax relief measures enacted during the 2023 Legislative Session, the conference also introduced an amended projection of $1.57 billion for FY 2023-24, serving as a relative decline of 3.5 percent compared to the preceding fiscal year due to legislative modifications, forecast refinements, and waning effects of post-Hurricane Ian recovery endeavors.

Apart from sales tax, the most substantial surge in forecasted revenue is categorized under the documentary stamp tax, which the state economists attributed to a less pronounced housing market slowdown than previously predicted. Additional revenue was also seen in intangibles tax, corporate income tax, and earnings on investments.

The upward adjustment reflects a more optimistic outlook for the Florida economy, with fewer concerns about recession and more stability expected in most sectors as the economy recovers from the COVID-19 pandemic. The housing sector was also notably stronger than economists had anticipated. The state collects tax revenue through documentary tax stamps, for example, when property deeds are transferred to a new owner.

But the forecast is not entirely positive, with economists anticipating fewer federal dollars flowing back into Florida, and lingering concerns about inflation and the rising cost of living. Medicaid spending remains a major question mark, particularly with the Biden Administration accusing Florida of botching the way it has handled this year’s Medicaid redetermination process.

The state has pushed back on those accusations, but actual costs for the program remain in flux. Medicaid consumes a substantial portion of Florida’s total revenue appropriations, but the state also manages the program so that costs are well below the national median, which helps bolster the state’s creditworthiness with ratings agencies like Fitch.

Last week, Fitch Ratings reconfirmed Florida’s triple-A financial status, which signifies the lowest anticipated default risk and is reserved for entities demonstrating a strong ability to honor financial obligations.

“Florida’s revenues are primarily driven by sales tax receipts, and have exhibited more economic sensitivity than other U.S. states on average,” reads the report. “Fitch anticipates Florida revenues will grow on a real basis based on the state’s economic and demographic fundamentals. The state exhibits very broad revenue-raising authority despite a constitutional restriction on the levy of a personal income tax.”

1 Comment

  1. Professor Larry Gillis, Cape Coral


    Christmas did NOT come early this year, Bubba, and this is NOT “found money”. It is MY money.

    Give it back. Now. (Mom says “Hello”)

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