Budget Watch - COVID-19 Impact

As Florida continues its battle with the COVID-19 pandemic, the state has released General Revenue (GR) collections data for June (the last month of the FY19-20 fiscal year).1 Collections came in $427.8 million (13.4 percent) below estimate, following losses of $878.1 million (29.4 percent) in April and $779.6 million (26.4) percent in May. Because collections were running a bit above estimate before the pandemic hit, the $2.1 billion loss in the last quarter puts Florida down $1.9 billion (5.7 percent) for the year. 

 As would be expected in Florida, where the Sales & Use Tax comprises such a large percentage of the state’s revenue, collection of said tax had the largest impact, accounting for 84.7 percent ($1.6 billion) of the yearly loss. Most of this was due to the virtual shutdown of the tourism and hospitality sector, resulting in sales tax collections coming in $937.9 million (52.8 percent) under estimate in the last quarter of FY2019-20—less than half of what was anticipated. Tourism-related collections were $43.1 million above estimate through March, so final collections were $894.8 million (14.0 percent) under estimate for the year. Collections in FY2019-20 were $686.1 million less than the prior year’s collections. Sales tax collections from tourism and hospitality accounted for almost half of the loss in total GR for the year.

Almost all sales tax sectors underperformed in the last quarter, with consumer non-durables (-18.4 percent), automobiles (-18.6 percent), durables (-16.7 percent), and business investment (-14.1 percent) all below forecast. Only building-related industries exceeded expectations (+12.4 percent).