by Andrew Powell
Despite incorrectly predicting a mild recession for the first two quarters this year, Florida officials estimate that the state’s economy and tax revenues will continue to grow.
The Office of Economic and Demographic Research held a Revenue Estimating Conference last week, with officials saying that the “current economic environment presented significant forecasting challenges.”
According to officials, household savings remain low, while the use of credit has increased due to inflation putting pressure on households. Despite this, revenue collections have exceeded previous projections by $1.08 billion or 2.3% for the year.
According to the conference data, for fiscal 2022-23, sales tax revenue was $35.8 billion. While this is projected to dip slightly for fiscal 2023-24 with $34.6 billion in revenue forecast, it is expected to increase until fiscal 2028-29.
Analysts noted that future risks to sales tax collections in Florida include a return to purchasing a mixture of goods and services by consumers. At the same time, they deal with an increased amount of debt and budget constraints during elevated inflation.
The documentary stamp tax forecast — a 35 cent per $100 levy on sellers on a mortgage, lien or other evidence of indebtedness — has significantly increased since the conference’s last forecasts, raking in $1.3 billion in revenue for fiscal 2022-23. Estimates for the tax have been raised by $256.8 million for fiscal 2023-24 and then again in fiscal 2024-25 by $160.3 million.
Intangible tax is assessed on mortgage lenders and forecasts for the tax were increased by $99.1 million for fiscal 2023-24 after revenue hit $525.6 million for the current year. Further, into the forecast, intangible tax is projected to increase yearly.
Corporate income tax increased to previous forecasts after fiscal 2022-23 with $5.5 billion collected. Forecasts increased by $188.5 million to $5.6 billion for fiscal 2023-24.
Earnings on investments are projected to increase by $172.8 million in fiscal 2023-24 after revenue data showed $493.8 million had been collected in fiscal 2022-23.
Overall, Florida had a net general revenue of $47.32 billion in fiscal 2022-23, a 7.5% increase over the previous year. Fiscal 2023-24 is forecast to dip by 3.5% to $45.66 billion. However, fiscal 2024-25 is projected to increase to $47.42 billion. Further into the forecast, Florida’s net general revenue is projected to increase by an average of 2.8% annually.
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Andrew Powell is a contributor to The Center Square.
Photo “Florida Capitol” by Michael Rivera. CC BY-SA 3.0.
