Florida continued to soar over revenue estimates in May, pulling in $741.8 million more than state economists expected, a report shows.
In total, the state received $4.27 billion in May, which reflects economic activity in April, well above the $3.5 billion estimate.
It’s the fourth straight month revenues have come in at least $475 million over the estimate. For the first five months of 2022, Florida has $2.86 billion more than state economists expected, and has collected 98.3% of the entire fiscal year estimate, with the month of June still to count.
The large overages are due to Florida’s swift economic rebound from the COVID-19 pandemic, but also the effects of inflation, which have resulted in skyrocketing prices on many consumer goods, pushing up sales tax collections.
Sales taxes led the way, accounting for 79% of the overage, beating state economists’ projections by $584.5 million.
As in previous monthly reports, this month’s report, published Thursday, notes that the large inflation — 8.6% for the 12 months ending in May — will likely lead to a drag on the economy in the future.
“The immediate response to inflation is an increase in sales tax collections that reflects the higher prices,” the report states. “Persistent inflation conditions, however, ultimately suppress collections as consumers begin to spend more money on non-taxable necessities like food and healthcare. In this regard, prices for food at home increased by 11.9 percent in May, the largest 12-month percentage increase since the period ending April 1979.”
For now, though, Floridians and tourists are spending freely in the Sunshine State, and the ratcheting up of interest rates by the Federal Reserve to drive down inflation hasn’t been reflected in the state’s coffers, at least not yet.
The report shows service charges came in $21.7 million over the estimate, largely due to documentary stamp taxes, which are charged on real estate transactions. Tourism-related sales taxes were nearly $158 million over the estimate.