Florida’s Revenue Estimators Predict Larger Budget Deficits
Mar 17, 2009
The Florida Office of Economic and Demographic Research General Revenue Fund Estimating Conference (“Conference”) met on Friday, March 13, 2009 to evaluate the impact of state tax collections for the remainder of fiscal year 2008-2009, and for 2009-2010.
Of note, Florida’s insurance premium tax collection is projected to decline through 2010.
Economists are now forecasting state tax collections for the last four months of the current fiscal year will plunge by another $1.1 billion. Over the budget year beginning July 1, 2009, revenues are predicted to fall by $2.3 billion, which is more than what Florida Governor Charlie Crist, lawmakers and economic experts were expecting.
Florida lawmakers must fill a $706 million deficit for the current fiscal year, in which a deficit of nearly $6 billion is projected.
Economists blamed the unexpected tax shortfall on the lingering credit crisis, slowing sales of cars and decreasing spending on household goods and leisure.
Florida’s sales tax, which provides three-fourths of the state’s overall tax revenue, is now expected to fall precipitously for a fourth consecutive year. The state’s six-cent sales tax generated $18.4 billion in the last fiscal year, but that total is predicted to decrease to $16.5 billion during the reminder of the current budget year, which ends in June 2009. Another drop to $15.9 billion is predicted in the 2010-2011 budget year.
Governor Crist has proposed spending $3.2 billion of federal stimulus funds in the current budget year to cover the $706 million deficit. The Governor also has proposed spending $4.7 billion in stimulus funds in his 2009-2010 $66.5 billion budget.
However, based on the new projections, Florida will need more than the federal stimulus funds to cover its revenue deficit. The Legislature is considering various means of raising more revenue, including a gambling compact with the Seminole Tribe, an increased cigarette tax and a five percent cut of state employee salaries. The repeal of sales tax exemptions also is being evaluated.
The Legislative Session runs through May 1, 2009. Work on the budget, which is the only bill the Legislature must pass during the Session, will begin shortly.
Materials from the March 13 General Revenue Fund Estimating Conference are below.
- Executive Summary
- General Revenue Financial Outlook Statement
- March 2009 Revenue Estimating Conference Changes To the Estimate
- March 2009 Revenue Estimating Conference Workpapers
Should you have any questions or comments, please contact Colodny Fass.
The Office of Economic and Demographic Research (“EDR”) is a research arm of the Legislature principally concerned with forecasting economic and social trends that affect policy making, revenues, and appropriations. EDR provides objective information to committee staffs and members of the legislature in support of the policy making process. EDR publishes all of the official economic, demographic, revenue, and agency workload forecasts that are developed by Consensus Estimating Conferences and makes them available to the Legislature, state agencies, universities, research organizations, and the general public. EDR, through a contract with the University of Florida, arranges for annual estimates of population of each city and county in Florida, which provide the basis for revenue sharing programs.
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