March 5, 2024

Tax Collections Beat October Expectations

TALLAHASSEE --- Despite the effects of deadly Hurricane Ian, Florida’s general-revenue tax collections in October came in 4.6 percent higher than projected by state economists.

A report issued Tuesday by the Legislature’s Office of Economic & Demographic Research said the state had $3.23 billion in net general revenue in October. That was $141.4 million over a projection for October that economists issued in August.

The total would have been higher if not for Hurricane Ian, a Category 4 storm that made landfall Sept. 28 in Southwest Florida and crossed the state, according to the report.

“At least $67 million was lost to the crisis within the hurricane-affected areas and the general dampening of sales activity elsewhere, with another $16 million likely delayed by the Department of Revenue's emergency order to push back the (tax) due date in six of the hardest-hit counties,” the report said.

The state’s September general-revenue collections also were $471.2 million over the projected amount.

During a Nov. 29 appearance in Jacksonville, Gov. Ron DeSantis hit economists for their forecasts, which have consistently underestimated the amount of money the state would bring in. A panel of economists known as the Revenue Estimating Conference periodically updates the projections, which are used by lawmakers to put together the annual state budget. General revenue plays a key role in funding programs such as schools, health care and prisons.

“When COVID hit, they're like, ‘Oh my gosh, it's gonna be a disaster,’” DeSantis said. “Then they realize, like OK, after a few months of this, like actually people are coming to Florida because we were, you know, open. And we saw things really take off. And we are always bringing in more revenue than they were projecting for the budget forecast. Finally in August, they revised it (projections) upward.”

DeSantis also used the Jacksonville appearance to tout the state’s financial shape, which he hopes will translate into providing tax cuts, credits to motorists who frequently use toll roads and infrastructure projects.

During his re-election campaign, DeSantis pitched a $1.1 billion package of tax breaks for the 2023 legislative session. He has also called for expanding a current six-month program that gives breaks to frequent toll-road users.

As part of a special legislative session next week, lawmakers will consider the toll-road credits.

Inflation has helped increase sales-tax collections because it leads to higher prices. October sales-tax collections — a major part of general revenue — topped a projection by $109.9 million. Corporate income taxes also came in $53.7 million higher than anticipated.

But as a potential sign of a slowing housing market, documentary-stamp collections were $27 million below the projection for October.

Meanwhile, the report said Floridians also continue to deplete savings. The personal-savings rate stood at 2.3 in October.

Before the COVID-19 pandemic, the savings rate in the 2018-2019 fiscal year was 7.9 percent. The rate ballooned to 33.7 percent in April 2020 as people cut back on spending and started receiving federal stimulus checks.

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