Budget Watch - General Revenue Estimates Increased by $392 Million
The General Revenue (GR) Estimating Conference met on January 15 to develop a new revenue forecast for Florida. These estimates of available GR are used by the Legislature in meeting its constitutional mandate to pass a balanced budget. The new estimate provides the Governor and Legislature some good news.
The GR Conference increased the estimate of collections by $306.0 million in the current year and $86.0 million in FY2020-21—a two-year total of $392.0 million. When coupled with other changes—such as more unspent GR from FY2018-19 rolling forward into FY2019-20—lawmakers have $567.1 million more available for the next budget than was anticipated when the Long-Range Financial Outlook was released last September (see Table 2). The Outlook predicted budget writers would have a surplus of $174.2 million after funding a continuation budget for FY2020-21 (before any tax cuts or trust fund sweeps).
These new estimates recoup some of the money lost from the previous estimate (August 2109), which reduced the forecast for GR by $867.7 million over the two years. Even with the increase, the total amount of GR now expected to be collected in FY2019-20 ($33.2 billion) is still less than collections in the prior year ($33.4 billion). A drop in net GR collections from one year to the next is a rare occurrence in Florida, happening only after the Great Recession. This decrease in FY2019-20 is due to the loss of all Indian Gaming Revenue and a windfall in corporate income taxes collected in FY2018-19—resulting from the federal Tax Cuts and Jobs Act—that is being refunded to taxpayers this year.
Positive annual GR growth is expected to resume next year, which estimated growth of 3.6 percent in both FY2020-21 and FY2021-22. This is despite a slight reduction in the estimate of collections for FY2020-21 of $25.5 million.