(The Center Square) — The Sunshine State’s monthly revenue report shows Florida continues to grow, despite the challenges of inflation.
In May, the report stated that the revised general revenue collections gained $99.9 million, up 2.4% over what was previously projected by the General Revenue Estimating Conference in March. Almost half of Florida’s gain came from earnings on investments.
Once total sales tax collections were adjusted to account for local taxes, audits, bad checks, and transfers — sales tax revenue was 0.6% or $17.8 million below what was estimated for the month, which the conference considers statistical noise.
Inflation has also played a role, as the Consumer Price Index has risen 4% between May 2022 and May 2023, bumping up sales tax collections. The report says sales tax collections are expected to be suppressed if inflation continues to persist long-term due to more people spending money on non-taxable items like food.
Revenue sources well above what was projected for May included earnings on investments which gained $46.9 million, the documentary stamp tax gained $25.3 million — a 24% rise — while insurance taxes earned $22.7 million for an increase of 7.1% for the month.
In total, 11 of Florida’s active revenue sources generated a total gain of $135.8 million for May, which included service charges, intangible taxes, corporate filing fees, tobacco tax, highway safety fees, Article V fees and transfers, severance taxes and pari-mutuel taxes.
Automobile sales taxes were well above the estimate, gaining $37.2 million or 6.7%, while other durables and building sales tax were 3.8% below estimates, losing $6.3 million and $8.7 million respectively.
Corporate income tax also took a loss of $17.8 million, down 4.4% for the month, while beverage taxes lost $6.5 million or 19.5%. Other taxes, licenses and fees had a shortfall of $2.4 million. Other nonoperating revenues lost $3 million or 27.3%.
The General Revenue Fund was also boosted by a decrease in refunds, which were $12.3 million below estimates.
The report states that May collections reflected activity during the previous month of April, and several factors contributed to the total collections. This included the cost of rebuilding post-Hurricane Ian, which added $19.3 million to the final liability for May.
While total post-hurricane recovery and rebuilding costs are estimated to reach a total of $577.3 million, the Department of Economic Opportunity has stated that the estimate is below the actual cost to rebuild and this could lead to pressure on collections, according to the report.
