A Florida TaxWatch Economic Report
Analysis: Florida 2014 legislation will reduce revenue by $550 million
Both state and local coffers will shrink as a result of legislation that was passed earlier this year.
All the bills passed by the 2014 Legislature have now been evaluated by the state's revenue estimators, resulting in a revenue reduction of more than $550 in the current fiscal year. Local revenues will be reduced by $41.5 million and $37.0 million. Despite the declining revenue estimates, the reduction still leaves $1.65 billion in general revenue reserves for the fiscal year, according to the latest Budget Watch from TaxWatch.
"Florida TaxWatch commends the Legislature for reducing taxes while still being able to increase funding in many important areas, such as education funding," said Dominic M. Calabro, president and CEO of Florida TaxWatch, the independent, nonpartisan, nonprofit taxpayer research institute and government watchdog. "Fiscal stewards in the Legislature wisely did not spend all of their available revenue, rather, they left a considerable amount in reserves, which strengthens Florida's fiscal future. However, TaxWatch encourages the Legislature to improve the integrity and transparency of the appropriations process to ensure accountability in budgeting."
The Budget Watch details the various measures that affect revenue. This legislation includes the tax cut package, bills that change the distribution of revenue, bills that direct funding to specific projects and other measures that reduce (or increase) revenues.
These new estimates show, in terms of actual tax and fee reductions in a given year, the Legislature fell a bit short of its $500 million tax cut goal. The tax package reduces state and local revenue by $398.8 million this year and $469.4 million next year. Other bills that were not part of the tax package, but could still be considered tax or fee cuts, add another $18.4 million to this year's tax cut totals.
In addition to bills reducing revenue, a few measures were passed by the 2014 Legislature to slightly increase revenues, including possible sales tax revenue from medical low-THC cannabis, a couple of new fees, and an increase in collections of E911 fees.
"The revenue reductions passed by the 2014 Legislature were reasonable, but they do create a tighter budget outlook for next year," said Kurt Wenner, Vice President of Tax Research for Florida TaxWatch. "The Legislature is now expected to have only $128 million more in General Revenue available for the next budget."
Florida TaxWatch is a statewide, non-profit, non-partisan research institute that over its 34-year history has become widely recognized as the watchdog of citizens' hard-earned tax dollars. Its mission is to provide the citizens of Florida and public officials with high quality, independent research and education on government revenues, expenditures, taxation, public policies and programs and to increase the productivity and accountability of Florida state and local government. Its support comes from homeowners and retirees, small and large businesses, philanthropic foundations, and professional associations. On the web at www.FloridaTaxWatch.org.