New General Revenue Estimates Add Another $4.0 Billion to Amount Available for the Next Budget
With state coffers already swelling, the General Revenue Estimating Conference (REC) met on January 21, 2022, to develop the state’s new forecast for general revenue (GR) collections. This is the revenue estimate that the 2022 Legislature will use for the new FY2022-23 state budget. The REC increased its estimate for GR collections by $3.3 billion in the current year (FY2021-22) and by $704 million in FY 2022-23. This means lawmakers have another $4 billion available to spend. Florida was already in its best fiscal shape in history.
Florida is now expected to have a budget surplus of $11.3 billion at the end of this fiscal year (not counting $3.5 billion in allocated federal Fiscal Recovery Funds expected to be received later this year.) Including those funds, the 2022 Legislature will have almost $54 billion in GR available for the new budget. Last session, lawmakers appropriated $36.5 billion in GR for the current budget.
Although the magnitude of the increase is remarkable, it was not entirely unexpected. Actual collections have exceeded estimates for 16 consecutive months, including beating the last monthly estimate (August 2021) by $2.2 billion in only the first six months of FY2021-22. Estimators cited federal stimulus dollars, Floridians spending elevated savings and a surging real estate market for the increase. Floridians’ purchasing mix has also been more heavily weighted to taxable goods as opposed to (largely) non-taxable services. It is expected these factors will start returning to normal. As a result, while the estimate for the current year was increased by $3.3 billion, the REC “crafted a glide path that that largely removes those effects.” This is why next year’s estimate was increased by only $704 million.
The new estimates for the current and next year are well above those made pre-pandemic and are $6.5 billion and $1.8 billion higher, respectively, than the August 2020 estimates, the first ones made after the pandemic began. Estimated annual growth of 10.8 percent in FY2021-22 follows actual growth of 15.7 percent in FY2020-21.
The 2022 Legislature will have approximately $50.5 billion in GR available for the FY2022-23 budget. Add the $3.5 billion from the American Rescue Plan coming later this year and available GR reaches $54.0 billion. This is $17.5 billion (47.9 percent) more than the $36.5 billion appropriated by the 2021 Legislature. While most of this is non-recurring funds, the state should have $39.2 billion in recurring funds available—$4.2 billion (12.0 percent) more than current recurring expenses.
But all this money presents its own challenges. There is going to be strong pressure to increase funding for government programs and calls to create new ones. Some will be needed and beneficial, but many will not. The years following the housing bubble (the Great Recession) showed what can happen when Florida state and local governments spend most of windfall revenues. Just because the state has a lot of money in the bank, taxpayers should not stop paying attention to how the government spends their money--Florida TaxWatch won’t.
Florida TaxWatch asks legislative leaders to recommit to the concerns and needs of taxpayers — today’s payers and tomorrow’s. We have a once-in-a-generation opportunity to invest in our future. This is an excellent chance to modernize and put Florida in an even more stable position moving forward, and we should not squander it. Let us not sprinkle these dollars where they won’t have a lasting impact.
Documents to download
Jan22-BW(.pdf, 240.12 KB) - 426 download(s)