Budget Watch - GR Estimates Down $32.6 Million
Florida’s General Revenue (GR) Estimating Conference met on August 16 and forecast that the state would collect $13.1 million less than expected in FY2018-19 and $19.5 million less in FY2019-20. This reduces the estimated GR that the Legislature will have for the next state budget by $32.6 million, a change of less than one-tenth of 1 percent.
This reduction in the GR estimates comes on the heels of the final tally for actual collections in the year just ended on June 30. Last years’ actual collections exceeded the previous estimate by $205.2 million. However, more than half of this surplus is attributable to one-time events, rather than a strengthening of the underlying revenue forecast. These events had the effect of shifting some collections from FY2018- 19 to FY2019-20. Most of this one-time revenue will be offset by reductions in the current year, which contributed to the reductions in the new estimates.
When last year’s extra revenue is added to the new reduced estimates, the Legislature now has an estimated $172.6 million more in GR than was previously estimated in February 2018. The actual collections in last year (FY2017-18), the estimates for the current year (FY2018-19), and the estimates for the next budget year (FY2019-20) all impact the amount of revenue that the 2019 Legislature will have at its disposal.
For the new forecast, some of the individual GR sources had their estimates decreased, while some were increased, essentially offsetting each other. The estimate for sales taxes, the state’s largest revenue source, was reduced by $78.1 million over the two years. Hurricane Irma reduced collections initially, but the subsequent recovery added $117.8 million.
The other big estimate reductions were for earning on investments, which was cut by $182.4 million over the two years and intangibles taxes, which were cut by $48.8 million. Estimated refunds were increased (which reduces net GR) by $74.2 million. The reductions were partially offset by increases in corporate income taxes ($162.9 million) and insurance premium taxes ($146.3 million).