The Florida House Ways and Means Committee kicked off its 2021 calendar Wednesday with a revenue review, impacted by a fall in tourism and a surge in unemployment, and long-term ramifications of an anticipated $3.3 billion revenue shortfall.
General revenue will not “catch up” to the pre-COVID projections until at least midway through the decade, leaving Chairman Rep. Bobby Payne, ranking Democrat Rep. Anna Eskamani, and the rest, with what one member called a “monumental task.”
A high-level report from staff director Vince Aldridge presented a grim landscape.
Unemployment, which ballooned with collapses in tourism and the service sectors in 2020, won’t be solved until tourism and a larger economic exuberance return. Revenue is down and it will take some time to even get to where things were before the virus changed the state last March.
Sales tax yokes tourism and revenue, and the most recent forecast does not get tourism back to where it was until 2024. By FY 23-24, unemployment should be back in line with pre-virus forecasting.
Revenue collection has also been a revelation, with the collapse in the COVID-19 recession interrupting a decade of growth. Growth may be back as soon as next fiscal year. But expect it to be slow.
Sales tax collection has fallen off a cliff, as 77% of general revenue collections and changes in consumption patterns have hit the state hard. Forecasts lag behind estimates from before the pandemic.
Eskamani honed in on the general revenue component.
“I just want us to look deeper if we can,” she said, asking if the reliance on sales tax is evidence of a “regressive” tax system, a framing discouraged by Payne.
At least one member wanted evidence of recovery, looking for more optimistic grounding for the committee weeks ahead.
Rep. Thad Altman urged a look from Aldridge at bright spots for the economy, calling the Revenue Estimating Conference projections “negative.”
For what it’s worth, those positives include forecasts more optimistic in areas like documentary stamps in December than in the previous forecast.
Housing sales and values are robust also, and Aldridge noted that corporate income taxes are also better than expected.
Updated economic projections will be available in March, so those who are looking for fresh numbers before advancing their pet tax proposals will have them early in the Session.