May tax revenues exceed expectation by 21 percent; rising inflation still a point of concern

by | Jul 3, 2022


  • Florida tax collection revenue brought in nearly $4.27 billion in May, exceeding predictions by 21 percent
  • Consumer nondurables and tourism sales tax accounted for the highest dollar amount at $159.3 million and $157.9 million, respectively
  • Economists worry that inflation could affect the way Floridians utilize discretionary spending
  • DeSantis touts inflation preparedness in the state budget

 

Tax collection revenue for the month of May surpassed expectations once again, exceeding projections by 21 percent. The state brought in just under $4.27 billion in general revenue in May, with sales tax accounting for almost 79 percent of the total, according to a report published by the Florida Office of Economic and Demographic Research.

Several sales tax categories contributed to the higher-than-expected totals, including consumer nondurables, comprised of items purchased for immediate use like food, gasoline, and clothing, bringing in $159.3 million over estimate. Tourism taxes provided another significant boost, gaining $157.9 million, or 26 percent over the month-over-month forecast. Other positive-gaining revenues include automobile tax, Insurance taxes, and corporate filing fees.

“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, the most recent personal income data indicated that personal saving has remained relatively steady—albeit subdued—since March, posting 5.4 percent in May,” the financial report states. “It is also notable that the Consumer Price Index for the all items index increased 8.6 percent for the 12 months ending May—higher than the 8.3 percent figure for the period ending in April. The immediate response to inflation is an increase in sales tax collections that reflects the higher prices”

Monthly revenues have repeatedly topped projections. During the first four months of 2022, collections exceeded expectations by $2.125 billion.

Despite the positive economic trends, experts anticipate that continually rising inflation rates could affect the way that Floridians spend money. Statewide, residents have seen surging prices in food, housing, and gas prices, leading some to pull back from discretionary spending.

“Persistent inflation conditions, however, ultimately suppress collections as consumers begin to spend more money on non-taxable necessities like food and healthcare. In this regard, prices for food at home increased by 11.9 percent in May, the largest 12-month percentage increase since the period ending April 1979,” the report expresses.

Gov. Ron DeSantis has addressed the bloating inflation issue, stating that he fears a recession could be on the horizon.

“I’m, quite frankly, concerned and worried about Biden plunging us into a recession,” DeSantis said in a recent press conference. “If you look at what he did when he came in, decided to print trillions and trillions of dollars, and the result of that’s been the worst inflation we’ve seen in this country in four decades. It’s killing people across the board to have to pay so much for gasoline, have to pay so much for bills, and have to pay so much for food.”

In totality, three-fourths of Floridians are “somewhat” or “very dissatisfied” with how the federal government is managing inflation and the rising costs of goods and services (77 percent).

With home values increasing by almost 70 percent in Florida over the past five years, 36 percent of Floridians who don’t own a home say that they are putting off buying due to the hot market as well as increased expenses, such as rising insurance premiums.

Despite this, Florida’s economy has fared better than most, to which state Chief Financial Officer Jimmy Patronis attributes DeSantis’ commitment to keeping business and services operational during the COVID-19 pandemic.

“Florida is able to provide this tax relief while having plenty of cash-on-hand because of the Governor’s decision to keep Florida open while battling COVID-19, which has created a more resilient economy – of which people from states like New York and New Jersey are flocking to in droves,” Patronis said.

1 Comment

  1. Tom

    All of this due to the best Governor in America’s efforts in keeping Florida open. Florida is the economic beacon of opportunity and hope. 3.O% unemployment rate. Wage growth was up 8.7%. America’s Gov, do for America what you have done for Florida.

    Reply

Leave a comment

 
%d bloggers like this: