State budget watchdogs are recommending elected officials take budget cuts and implement new plans that would save the state a net $6 billion annually.
The Florida TaxWatch report comes the day after lawmakers delivered their $93.2 billion spending plan to Gov. Ron DeSantis, who is expected to issue hundreds of million dollars in vetos because of the COVID-19 pandemic. April’s revenue report alone, which mostly included sales tax receipts from before the lockdown, already showed an $878.1 million shortfall.
TaxWatch stopped short of recommending the Legislature convene for a Special Session, but suggested it take up sales tax e-fairness legislation, which could capture more than $550 million annually, and a renewed Seminole Compact, which could generate between $350 million and $750 million in the first year. The nonprofit’s president and CEO, Dominic Calabro, has said a Special Session is more than likely, but legislative leaders have denied that such a move would be necessary.
They also suggested the state postpone raising teacher and state employee salaries and issuing bonuses until the new year or July 2021 as a last resort, which could save nearly $700 million, but would dampen some of the Governor’s biggest legislative wins. That’s in addition to its prior guidance that the Governor veto all member projects, of which there are 829 valued at more than $500 million, that don’t directly support the state’s pandemic response.
“The impact of COVID-19 on Florida’s families and economies cannot be overstated,” said TaxWatch’s executive vice president, Robert Weissert. “While Florida has strong reserves due to years of good financial prudence by the Legislature, Governor DeSantis and previous administrations — and federal funding from the CARES Act will certainly help with related expenditures — COVID-19 has quickly placed Florida’s economy at risk of slipping into uncertainty.”
On Tuesday, DeSantis told reporters he would be issuing massive vetos to the budget to help it afloat, including slashing some of his own priorities.
“There’s going to be a lot more vetoes. It’ll be a lot of red,” DeSantis warned. “It’s kind of the veto equivalent of the Red Wedding from ‘Game of Thrones.’”
With online shopping on the rise as people stay sheltered at home, Calabro highlighted the potential sales tax dollars, technically owed to the state, that have eluded Florida without e-fairness legislation. Florida and Missouri are the only states that have not implemented e-fairness legislation, like what Sen. Joe Gruters filed ahead of the 2020 Session.
“I think by adding e-fairness, we’re actually going to add some progressivity because more and more purchases are made by people of middle and upper-middle income and beyond,” Calabro said. “I think we reduce the regressivity and add a little bit of progressivity to our taxes at the same time.”
In the long-term, TaxWatch also recommended releasing non-violent elderly inmates that cost the state at least $75 million annually and selling advertising space on electronic highway signs, which California recently said could generate it tens of millions of dollars.
The organization also recommended the Legislature dedicate 5%, or $1.7 billion, of appropriated general revenue to the General Reserve and consider using bonding to fund fixed capital outlay spending, which could save $1.2 billion.
DeSantis has until the end of the month to approve the spending bill, which goes into effect July 1.