Florida sees $2 billion loss in 2020 budget due to coronavirus
Florida finished fiscal 2020 with a nearly $2 billion loss in the state's general revenue fund because of the COVID-19 pandemic.
The economic disruptions created by the coronavirus mean the state's revenue came in 5.7% lower than forecasters anticipated during their revenue estimating conference in January.
State sales taxes were the hardest hit revenue source by the June 30 year end. Collections came in at $24.59 billion, down $1.59 billion or 6.1% from what was forecast, according to the Legislature’s Office of Economic & Demographic Research.
Because Florida doesn’t have a state income tax, the state relies heavily on its 6% sales tax. Those collections account for 79% of total revenues that support the state budget.
Gov. Ron DeSantis didn’t comment on whether the year-end report would affect the fiscal 2021 budget, from which he slashed $1 billion.
DeSantis signed the $92.27 billion budget into law two days before it took effect on July 1. It includes $2.3 billion in unallocated general fund revenue as part of the state’s reserves. Another $1.7 billion is in the budget stabilization fund and $1.5 billion is available in trust funds and tobacco reserves, if needed.
Senate President Bill Galvano, R-Bradenton, released the year-end revenue report to colleagues Monday and said more details will be released next month.
"As we near the end of the first month of the new fiscal year, it is hard to believe the wide-ranging impact the coronavirus has had on our state, nation, and world in just five short months," Galvano said in a memo to senators.
State forecasters will refine the year-end budget details in a long-range financial outlook report during a general revenue estimating conference scheduled for Aug. 14, he said.
From the beginning of the 2020 fiscal year through March, overall revenue collections posted a gain of $202.4 million compared to estimates made by forecasters.
As the coronavirus impact worsened in April, May and June, total revenue losses were $2.1 billion across all sources, the EDR said. The greatest loss for the three-month period was reported in May, which reflected activity that occurred in April.
Sales tax collections in April were down by 42.9%, largely as a result of the governor’s "Safer at Home" order, which closed all non-essential businesses. The state also delayed payments for corporate income and franchise taxes until Aug. 3 that were due in May, June and July.
For the year, corporate income tax filings were down $356.9 million or 21.2% under what was forecast, while corporate filing fees were down by $43.5 million or 7.7% less than anticipated.
Some revenues came in above estimates for the year. Those included earnings on investments at $370.6 million, an increase of 54.2%; insurance taxes of $972.5 million, up 10.9%; and $983.1 million in documentary stamp taxes on real estate transfers, an increase of 7.8%.
Volatility in state tax collections is likely to continue for some time as Florida has become a hotspot for COVID-19 infection rates, which has received widespread coverage in the media.
On Sunday, data from Johns Hopkins University's coronavirus tracking program showed Florida passed New York with the number of confirmed cases. At that time, 423,855 people in Florida had tested positive, compared to 411,736 in New York. California was leading with 450,242 cases.
On Tuesday, the Florida Department of Health reported a total of 441,977 cases of the virus, and 6,201 deaths.
Florida’s unemployment rate also remains high. The seasonally adjusted rate was 10.4% in June, down 3.3 percentage points from the revised May 2020 rate, and up 7.2 percentage points from a year ago, according to the Florida Department of Economic Opportunity.
"June labor statistics reflect the continued effects of COVID-19 and the efforts to reopen businesses and services," the DEO said. "The number of jobs in Florida was 8,396,900 in June 2020, down 541,800 jobs compared to a year ago."
The only industry gaining jobs over the year was construction, when work in that area was up by 4,600 jobs, or 0.8%. The industry losing the most jobs over the year was leisure and hospitality, down by 268,400 positions for a loss of 21.5%.
The state’s next release on job data is scheduled for Aug. 21.