The state of Florida may have lost nearly $900 million in tax revenues in April, with the coronavirus halting tourism and other industries on which our economy depends heavily.
Last March, the state Legislature approved a $93.2 billion budget that it was preparing to send to Gov. Ron DeSantis for his signature.
The session to approve the plan took place as DeSantis was beginning to shut down some businesses while implementing stay-at-home measures.
Included in the budget are pay raises for teachers and state workers, affordable housing dollars and environmental spending requested by state Democrats.
DeSantis, along with House and Senate leaders, want to wait and add to the budget additional pandemic-related aid that could be coming from Congress.
Until businesses began closing and stay-at-home orders went into effect, Florida officials were expecting to take in about $3 billion in tax revenues last month, but learned this week that they fell short by $878 million.
A monthly revenue report from the Legislature’s Office of Economic & Demographic Research reflects the effects of the pandemic and the stay-at-home orders on the state’s tax income.
“The presence of coronavirus in Florida presented its most serious threat to the sales tax forecast, especially to those taxes collected from tourists,” explains the report. “In addition, critical supply chains were already interrupted by the impact to other countries and retail sales displaced as a result of social distancing and crowd-avoidance behaviors.”
Net revenue for April was projected to be $2.984 billion, but ended up at $2.106 billion.
Sales tax revenues from tourism were down 24.1 percent, or $598.2 million.
“In other words, as people from other states face job losses and are unable to travel to Florida, tourism-generated economic activity and the state’s revenue suffers,” said Robert C. Osborne, board chair of the Florida Policy Institute.
Great news for Floridians and our valuable state employees! https://t.co/8NAVadt899
— Rob Bradley (@Rob_Bradley) March 7, 2020
Florida Republican leaders believe that tax collections will begin slowly recovering, now that restaurants, retailers and other businesses are reopening.
“Our ability to successfully navigate the current fiscal situation will require the same deliberate, professional, fact-based decision making we have employed in Florida for decades,” Senate President Bill Galvano, R-Bradenton, said in a memo to senators.
He added that although April’s report showed tax collections dropping, the state actually remained over its first-quarter revenue estimate by about $202 million.
Still, other revenue sources, including corporate income taxes, highway safety fees and corporate filing fees, collectively earned $323.1 million below previous estimates, due to new state orders allowing delayed payments until June or later.
However, revenue from the documentary-stamp, intangibles, beverage, tobacco and severance taxes and earnings on investments exceeded projections.
“Together, these sources generated a total gain of $40.9 million for the month; however, some of these sources are expected to experience losses in the coming months as lagged economic effects begin to appear,” the report said.
There is no word on when Gov. DeSantis plans to sign the budget, which is scheduled to take effect July 1.