Florida revenues fall by nearly $900 million amid pandemic
TALLAHASSEE, Fla. (AP) — The state of Florida might have lost nearly $900 million in tax revenues in April — far more than state officials anticipated — as the coronavirus pandemic siphoned away tourist dollars and other revenues from the state’s coffers, according to estimates released Tuesday.
The outbreak was certain to impact the state budget, and it became staggeringly clearer on Tuesday by just how much.
The state Legislature has yet to forward the $93.2 billion budget it approved in March to Gov. Ron DeSantis for his signature. Lawmakers approved the budget just days after the governor began shuttering some businesses and putting stay-at-home measures in place.
The budget lawmakers approved budget included $300 million in extra reserves to help address the economic hardship wrought by the outbreak. The budget also includes $25.2 million requested by the governor to directly combat the virus, and $27 million in emergency funds from the federal government.
But Florida officials, who had expected to take in nearly $3 billion last month, fell short by $878 million — a hefty sum that may now have to be addressed by lawmakers. It remained uncertain if they will convene a special session.
Better than expected revenues during the first three months of the year, however, will help blunt some of the fiscal impacts from April. During the first quarter of the year, revenues from sales and corporate taxes, as well other taxes exceeded estimates by $202 million, according to state officials.
Still, April’s massive revenue shortfall released by the state’s Office of Economic & Demographic Research adds to Florida’s economic turmoil and puts pressure on the governor to quickly revive the state’s economy.
On Friday, the state announced that the unemployment rate shot up to 12.9%, which Senate President Bill Galvano said was “our first real glimpse into the severity of unemployment due to the COVID-19 Pandemic.”
Tuesday’s revenue update was another sign of how devastating the outbreak has been on the economy.
In April, sales tax collections were nearly $600 million behind projections, much of it because of the downturn in tourism and other hospitality-related industries. Tax revenues from car sales were also down.
State officials hope the worst is over and that revenues will begin recovering soon, as restaurants, retailers and other businesses begin seeing increased traffic.
“Our ability to successfully navigate the current fiscal situation will require the same deliberate, professional, fact-based decision making we have employed in Florida for decades. The situation continues to evolve on a daily basis and additional data in the coming weeks will be critical,” said Galvano, a Republican, in a statement Tuesday afternoon.
Galvano said he generally opposes using federal money to directly bail out states from their financial predicaments. Nevertheless, he wants the federal government to clarify whether states can offset some of its revenue losses by using the $4.6 billion Florida has already received as part of the federal coronavirus relief package.
“Every business in our state will agree that lost revenue is an undeniable cost of the pandemic, and the same is true for the operations of our state government,” Galvano said.
Senate Democratic Leader Audrey Gibson hopes the federal government will allow Florida and other states to use the money to relieve their budgetary distress. And she hopes her fellow lawmakers, particularly the Republican majority, will accept the funding for that purpose.
“There’s no reason to thumb your nose at funds that will help our state and people recover,” Gibson said.
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