Budget Watch - More Revenue for the Next Budget
As the Florida Legislature prepares to go into conference budget negotiations to finalize the FY2018-19 budget, state estimators gave lawmakers a bit of good news. Florida’s General Revenue (GR) Estimating Conference met on February 9 and forecast that the state would collect an additional $461.8 million in FY2017-18 and FY2018-19. This is money for the new budget that the House and Senate did not know they had when they developed their spending plans in the first half of this session. Estimated GR was revised upward by $181.3 million in FY2017-18 and by $280.5 million in FY2018-19.
The increased estimates are not the result of better-than-expected economic and normal revenue growth. Earlier estimating conferences had adopted slightly weaker near-term national and state economic forecasts. Instead, the change comes mostly from two factors: increased sales tax collections from hurricane rebuilding and a change in how gaming payments from the Seminole Tribe are made.
Since the last estimates were made in August 2017, actual collections have come in slightly below the forecast. The economists believe this is due to disruptions from Hurricane Irma. Without the hurricane and gaming factors, the GR estimates would have largely been unchanged. In fact, more revenue sources had decreased estimates than increased over the two-year period.
Sales taxes, the state’s largest revenue source, was increased by $359.4 million over the two years—more than two-thirds of that is from hurricane rebuilding. Indian Gaming revenues were increased by $106.7 million. Some of the increase ($25.3 million) is due to higher net casino winnings, but most ($81.4 million) comes from the change in revenue sharing methodology. The hurricane and the gaming methodology account for 75.7 percent of the total GR increase.