Florida pulls in nearly $400M more in taxes than expected
TALLAHASSEE — Florida lawmakers got another boost last week as they prepare to start the 2022 legislative session and draw up a new state budget.
The state in November collected $398.8 million more in general-revenue taxes than expected, continuing a series of months of higher-than-projected revenues, according to a report released by state economists.
That is good news for lawmakers, in part, because general revenue plays a critical role in paying for schools, health care and prisons.
The report on Thursday echoed earlier analyses that pointed to consumers continuing to spend after saving money earlier in the COVID-19 pandemic. Also, it cited issues such as child-tax credit changes that were part of a federal stimulus law.
“November collections reflect activity that largely occurred in October, which continued to benefit from the Advance Child Tax Credit payments; redirected spending from the hard-hit service sector and some consumers’ ability to draw down atypically large savings that built up during the pandemic,” said the report by the Legislature’s Office of Economic & Demographic Research.
Also, the report indicated that tax collections benefited from higher prices linked to inflation.
“The immediate response to inflation is an increase in sales tax collections that reflects the higher prices,” the report said.
The economists, however, reiterated recent analyses that Floridians have cut back on saving money after padding their bank accounts earlier in the pandemic.
“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, just released personal income data indicated that the personal savings rate was below normal at 6.9 percent for November 2021,” the report said. “This was the second month of subpar savings.”
Lawmakers will start the legislative session Jan. 11 and will be flush with cash because of a flood of federal stimulus money and the higher-than-expected state tax collections.
Gov. Ron DeSantis has proposed a $99.7 billion budget that will serve as a starting point as lawmakers negotiate a final spending plan for the fiscal year that will start July 1.
Economists periodically revise projections of general revenue, with the latest revision in August. In addition to topping the projections by $398.8 million in November, the state exceeded them by $435.5 million in October and $442.2 million in September.
The vast majority of the November boost came from sales taxes, which were $294.8 million over projections, according to the report. The state had expected to collect $2.3792 billion in sales taxes and brought in $2.674 billion.
The state also collected $29.1 million more than expected in documentary-stamp taxes, which stem from real estate transactions.