Florida economy exceeds expectations again; budget boosted by nearly half a billion dollars

by | Dec 2, 2021

TALLAHASSEE — With Gov. Ron DeSantis ready to release a 2022-2023 budget proposal next week, Florida continues raking in more tax dollars than expected.

A new report said the state brought in $435.5 million more in general revenue in October than had been projected in an August forecast. General revenue plays a critical role for DeSantis and lawmakers, as they rely on it to help fund schools, health-care programs and prisons.

The report indicated Florida consumers continued opening their wallets after saving heavily earlier in the COVID-19 pandemic. Of the $435.5 million in higher-than-expected revenue, $304.2 million — or about 70 percent — came from sales-tax collections.

“October collections reflect activity that largely occurred in September, which continued to benefit from the Advance Child Tax Credit payments; redirected spending from the hard-hit service sector and some consumers’ ability to draw down atypically large savings that built up during the pandemic,” said the report, referring to child-tax credit changes that were part of a federal stimulus law.

The report, released Tuesday by the Legislature’s Office of Economic & Demographic Research, also pointed to a relatively low savings rate in October.

“After increasing to a historic peak rate of 33.7 percent in April 2020 from the 7.9 percent for the entire 2018-19 fiscal year, just released personal income data indicated that the personal savings rate was below normal at 7.3 percent for October 2021,” the report said.

DeSantis is poised to release a budget proposal next week that will be flush with cash from higher-than-expected state tax collections and federal stimulus money. Lawmakers will use DeSantis’ proposal as a starting point as they negotiate a budget during the legislative session that will begin in January. The 2022-2023 budget will take effect July 1.

The state has consistently exceeded revenue projections during the past year as the economy has recovered after being hammered early in the pandemic. September collections, for example, were $442.2 million above projections.

Florida in October collected more than $3.234 billion in general revenue, compared to the $2.799 billion projection. In addition to sales taxes, the state topped projections in areas such as corporate income taxes and documentary stamp taxes, which are collected on real-estate transactions.

The state’s Revenue Estimating Conference, a panel of economists from the House, Senate and governor’s office, is scheduled to update a general-revenue forecast on Jan. 21. Lawmakers will use that update in finalizing the new budget.


%d bloggers like this: