Florida finished the 2019-20 fiscal year with a $1.9 billion revenue shortfall, according the June (2020) Revenue Report released yesterday by the state Office of Economic and Demographic Research. The short fall was fueled by a coronavirus-driven drop in sales taxes.
In total, the state took in nearly $428 million less than anticipated.
The June revenue estimate, primarily reflects May activity, showed state revenues nearly $428 million below estimates. The biggest chunk of that — $328 million — was from reduced sales tax collections. Corporate income tax collections also missed the mark by nearly $90 million.
The June report, built on the $1.6B short fall sited in the May report.
Why this matters? When drawing up the $93.2 billion state budget for the 2020-21 fiscal year, budget writers were counting on rolling $1.9 billion in unspent money from the previous fiscal year forward. Now, that money has largely evaporated due to the decline in collections.
Florida continues to spend hundreds of millions of dollars to combat the virus under Gov. Ron DeSantis’ a pandemic executive order. That spending, coupled with the revenue shortfall, has created a problem. Unless Florida can get significant relief from the federal government, to put with the state’s roughly $6 billion in reserves lawmakers will be forced to call a special legislative session to cut the budget.
State economists will meet again on Aug. 14 to draw up new general revenue forecasts, which will show whether or not the state has remained in the black or is serious financial trouble.
Moody’s Analytics in April estimated that business shutdowns and expenditures related to the pandemic could blow an $8 billion to $10 billion hole in the state’s 2020-21 budget.