Florida’s tax revenue holds steady amid national decline

by | May 14, 2024

Despite a national decline in state tax revenues, Florida’s financial health remains strong, with only a minor decrease in tax revenue for fiscal year 2023.

Amid a national decline in state tax revenues, Florida’s financial health remains comparatively strong, according to an economic report published by The Pew Charitable Trusts on Tuesday.

According to the analysis, Florida saw a decrease of less than 1 percent in inflation-adjusted tax revenue for fiscal year 2023, standing in contrast to the comparatively large drops seen in other states, such as California and New York, which experienced declines of 36.5 percent and 23.7 percent respectively.

“45 states reported lower year-over-year inflation-adjusted tax revenue in the second quarter of 2023, with declines ranging from 59 percent in Alaska, 36.5 percent in California, and 23.7 percent in New York to less than 1 percent in Florida,” the report states.

In the second quarter of 2023, state tax collections nationwide were 1.2 percent below the 15-year trend. However, Florida’s diverse economy and reliance on sales taxes have helped maintain stability. State economists have raised Florida’s general revenue projections by $2.18 billion for the current and next fiscal years, partially attributed to hurricane relief.

Sales tax collections have been particularly strong for the state, exceeding projections by 4.1 percent through December 2023. The performance was driven by inflation and robust consumer spending, as well as other factors such as tourism and real estate.

Despite the positive outlook, state economists caution about potential future disruptions from geopolitical events, national fiscal policies, and Federal Reserve actions. However, Florida’s current fiscal health positions it well to handle these uncertainties and continue supporting essential public services and programs.

Amy Baker, coordinator of the Legislature’s Office of Economic & Demographic Research, noted earlier this year that while the economic environment has stabilized since August, there remains a potential for future disruptions. The long-term forecast projects moderate annual revenue growth of 1.6 percent to 2.9 percent after the current fiscal year ends on June 30.


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