Florida’s September revenues beat expectations by $470M

Florida brought in more than $470 million more in revenues than expected in September, the largest number since the start of the fiscal year in July.

The September revenue report, released Tuesday, reflects economic activity during the month of August and wasn’t affected by Hurricane Ian, which hit Southwest Florida on Sept. 28. It shows Florida brought in $4.07 billion, or $471.2 million more than economists projected.

The large figure is a return to earlier in 2022 when inflation shot up nationwide, pushing up revenues from sales taxes, upon which Florida is heavily reliant, and monthly reports showed the state beating previous forecasts built upon lower inflation figures by hundreds of millions of dollars.

Sales taxes again led to the large overage, beating the forecast by $301.4 million. Corporate income taxes came in at $157.7 million above estimates, and only beverage taxes and earnings on investments came in significantly under the expected marks, at $10.3 million and $17.6 million, respectively.

Economists, though, warn inflation — which hit 8.7% over the summer, a level not seen since the early 1980s — will begin to bite as consumers spend down their federal stimulus and savings.

“The overage … reflected the continued reliance on savings to support personal consumption and first-round inflationary effects,” the report states.

“The immediate response to inflation is an increase in sales tax collections that reflects the higher prices. 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 13.0 percent in September, only slightly down from the 13.5 percent in August.”

The crunch from long-term high inflation could come soon. On Wednesday the Federal Reserve, led by chairman Jerome Powell, raised the benchmark interest rate by 0.75 percentage points to 4% in an attempt to ground down the inflation. The main interest rate had been below 1% at the start of the year.

Gov. Ron DeSantis has said the state is prepared to absorb any recession brought on by inflation and higher interest rates because it has $20 billion in reserves.