COVID-19 Continues To Batter Florida Tax Revenues
State tax revenues continued to take a hit in June as Gov. Ron DeSantis expanded economic-recovery efforts amid the coronavirus pandemic, a new report shows.
The report released Monday by the Legislature’s Office of Economic & Demographic Research said Florida’s general-revenue collections in June were $427.8 million below a forecast amount. That followed even larger losses in April and May as businesses shut down or dramatically scaled back and as consumers stayed home because of the pandemic.
“A large part of the loss over the quarter is attributed to declines in the tourism and hospitality-related industries, but the impact was widespread as all categories other than building-related industries were affected,” the state economists’ report said.
In all, the state collected about $2.1 billion less than forecast during April, May and June, the final three months of the 2019-2020 fiscal year. The state finished the year collecting about $1.88 billion below projections, as it brought in more than expected early in the year to partially offset the later losses.
Still, the report isn’t expected to result in lawmakers rushing back to Tallahassee to address the state budget, as Democrats have requested. Republican leaders have not shown any indication lawmakers will return to Tallahassee until they hold an organization session after the November elections.
Senate President Bill Galvano, R-Bradenton, reminded senators in a memo Monday that economists from the Senate, House, governor’s office, and the Office of Economic & Demographic Research must develop a long-range financial outlook, which would be used in making future budget decisions. That outlook will go to the Joint Legislative Budget Commission --- a panel made up of House and Senate members --- for review and issuance by Sept. 15.
Galvano and other Republican leaders have previously expressed cautious optimism about the state’s finances because of issues such as $4 billion in state reserves, federal stimulus money and $1 billion in cash-conserving budget vetoes issued by Gov. Ron DeSantis.
In Monday’s memo, Galvano noted revenue and employment at hotels and attractions have suffered because of coronavirus social-distancing requirements, and a return to “typical levels” in the hospitality industry may not occur until 2022.
Also, Galvano pointed out that 30-day delinquencies in home loans have risen sharply, employers are indicating they will be forced to lay off workers if business remains weak as support from the federal Paycheck Protection Program winds down, and demand for single-family homes could be impacted this fall if high unemployment persists.
“As we near the end of the first month of the new fiscal year, it is hard to believe the wide-ranging impact the coronavirus has had on our state, nation and world in just five short months,” Galvano wrote in the memo.
Democrats have urged Republican leaders to call lawmakers back into session before the November elections to address the economic situation and overall impacts of the pandemic. Florida in recent weeks has faced a massive increase in cases of COVID-19, the respiratory disease caused by the coronavirus.
As cases topped 432,000 on Monday, Democrats continued criticizing DeSantis’ economic-reopening efforts.
“We need to do everything we can to reduce the number of infections and reduce the number of deaths. Once we do that, we could have a serious conversation about reopening,” U.S. Rep. Donna Shalala, D-Fla., said in a conference call with Democrats and teachers on Monday. “Very clear, we have reopened too soon. And when we're starting to play around the edges, opening bars or opening gyms, we're really perpetuating this community spread, which is so dangerous for our community because people are dying unnecessarily.”
DeSantis, who started to reopen the state on May 4, pushed all but South Florida into the second phase of the recovery effort in early June, allowing bars, movie theaters and gyms to reopen, while upping indoor occupancy of restaurants and retail outlets from 25 percent to 50 percent. His administration later largely shut down bars because of widespread violations of social-distancing requirements.
The state also saw major entertainment venues start to reopen in June with social-distancing rules that included limited capacity. Walt Disney World began reopening its parks in Central Florida on July 11.
For June, the general-revenue projection was $3.19 billion, with the actual monthly total at $2.763 billion.
The biggest hit came in sales-tax collections, which were off $328 million in the month, followed by corporate income taxes, which were down $86.2 million. Highway safety fees were off $17.5 million, and documentary stamp taxes on real-estate transactions were $16.9 million below estimates. Beverage taxes were off $11 million, while tobacco taxes were short $5 million.
Revenue exceeded projections in corporate filing fees by $37.7 million, while earnings on investments were up $4 million and intangible taxes were up $7.7 million.