Florida tax revenues soar by 24% past expectations in July

TALLAHASSEE — Bolstered in part by people continuing to spend down savings amassed during the COVID-19 pandemic, Florida general-revenue collections exceeded expectations by 24% in July.

Collections of revenue such as sales taxes were $619.8 million above what state economists projected in April, according to a report released by the Legislature’s Office of Economic & Demographic Research.

The July figures, which reflect economic activity that mostly occurred in June, benefited from the most recent round of federal stimulus checks, redirected spending from the hard-hit service sector and some consumers drawing upon “atypically large savings” built up during the pandemic, the report said.

Floridians’ personal saving rate, the percentage of disposable income people save, stood at 9.6% in July, up from 7.9% during the 20182019 fiscal year, according to the state economists. During the pandemic, as people limited movement and spending, the saving rate hit a record 33.7% in April 2020.

Sales tax collections for July were 25.2% over their forecast amount and accounted for 89% of the overall increase above projections. Sales taxes have rebounded, in part, with the return of tourists to the state.

Sales taxes from tourism were 32.8% over the forecast for July. Revenue from automobile sales was 31% higher than the forecast.

General-revenue taxes play a key role in funding programs such as schools, health care and prisons. Lawmakers, who use the estimates as they work on a state budget, are returning to Tallahassee on Monday for the first in a series of committee weeks leading up to the 2022 legislative session, which will start in January.

The general revenue total of $3.165. 9 billion for July marked the 12th consecutive month in which the state exceeded forecast numbers. General revenue had been forecast at $2.546.1 billion for the month.

In August, economists issued a report that estimated Florida lawmakers will have $2.6 billion more in general revenue than previously forecast for this fiscal year and the 2022-2023 fiscal year. Also, they will have nearly $6 billion in unspent federal coronavirus stimulus money. The current fiscal year started July 1.

Still, economists anticipate an eventual slowing, but not a reversing, of the current economic direction.

“We know people had more money to spend on goods because they weren’t able to spend on services,” Amy Baker, coordinator of the Legislature’s Office of Economic & Demographic Research, said when updating estimates Aug. 17. “The big challenge for us today was trying to figure out over the course of this year is, when does that shift back to normal occur and how smooth will that be?”

Florida also saw increased revenues from housing-related taxes. Documentary stamp tax collections were up 121.2% over the April forecast, indicating “the housing market prices and activity were stronger than expected,” the report said. Also, intangible taxes were up 79.5% on the forecast, showing strong refinancing activity.