Budget Watch - General Revenue Estimates Inject $842 Million Into The Next Budget Process
Less than a week after the Senate Appropriations Committee heard a gloomy presentation on the outlook for the upcoming budget, the General Revenue Estimating Conference met on December 18 and increased the revenue projections by $461.5 million in FY2018-19 and another $380.5 million in FY2019-20. This means the 2019 Legislature will have an estimated $842 million more in General Revenue (GR) collections for the next state budget than was previously expected.
Nearly all of the increased estimate is due to forecasts for the sales tax and corporate income tax, the state’s two largest GR sources. Minor up and down revisions in the other sources (along with an increase in estimated tax refunds) largely canceled each other out. The sales tax estimate was increased by $490.5 million over the two years and corporate income taxes were boosted by $341.4 million.
The increase in the GR estimate is the largest one the GR Conference has adopted since April 2006.
The huge increase in the GR estimates is somewhat surprising, coming on the heels of recently adopted Florida and national economic forecasts which were slightly weaker in several key areas than the previous forecast. Generally, the Florida economy appears sound, with negatives such as construction activity being offset by strong tourism. Actual monthly GR collections have been consistently exceeding the previous estimates (August 2018), leading to the state’s forecasters increasing the GR estimates.
The revised FY2018-19 estimate exceeds the prior year’s collections by $1.48 billion and FY2019-20 revenues should grow by another $1.01 billion. The state is now expecting to collect $32.705 billion in GR during the current year and $33.715 billion in FY2019-20. This represents annual growth of 4.8 percent and 3.1 percent, respectively. Longer-term, annual growth of 3.1 percent to 3.7 percent is now expected through FY2023-24.