TALLAHASSEE, Fla. – State economists on Tuesday increased general-revenue projections by about $2.18 billion for the current fiscal year and next year, giving a boost to lawmakers as they put together a new budget.
But more than $700 million of that increased revenue has already been allocated for things such as hurricane assistance and home-hardening programs.
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Also, a long-range forecast projects mostly moderate annual revenue growth --- 1.6 percent to 2.9 percent --- after the current fiscal year ends June 30.
That could mean hard decisions as lawmakers push priorities with big price tags.
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General revenue, which is made up of such things as sales taxes, plays a critical role in funding programs such as education, health care and prisons. A panel of economists, known as the Revenue Estimating Conference, meets periodically during the year to revise general-revenue estimates.
The projections released Tuesday replaced estimates issued in August and will be used by lawmakers in the coming weeks as they negotiate a budget for the 2024-2025 fiscal year, which will start July 1.
Most of the increase in projected revenues, about $1.591 billion, is expected during the current year.
Amy Baker, coordinator of the Legislature’s Office of Economic & Demographic Research, said that while the forecast environment has “greatly” stabilized since August, a potential for disruptions continues from geopolitical events, national fiscal-policy decisions and future Federal Reserve actions.
“Things are much more stable. We have a lot of confidence in what we’ve seen that was reflecting a good level of (economic) activity for a variety of reasons. It’s going to last a little bit more,” Baker said. “But long term, once you get out of this year, there really wasn’t a big change to either our national or our Florida economic forecasts. So, it didn’t warrant persisting that level of change or that kind of a change into future years.”
The forecast boosts revenue projections by about $585.5 million, or 1.6 percent, for the 2024-2025 fiscal year and by $505.9 million, or 2.3 percent, for 2025-2026 fiscal year. The outlook goes up by $586.5 million, or 2.9 percent, for the 2026-2027 fiscal year and by $458 million, or 2.7 percent, for the 2028-2029 fiscal year.
In the August forecast, economists removed the prospects of a “mild” recession that was in the forecast earlier.
General revenue collections through December were up $1.26 billion, or 6 percent, over the August forecast, said Stephanie Massengale, who oversees monthly revenue and financial-outlook statements for the Office of Economic & Demographic Research.
The primary driver has been sales-tax collections, which were 4.1 percent over projections. They were followed by increases in corporate income taxes, earnings on investments --- because of favorable interest rates --- and insurance premium taxes, Massengale said.
Inflation has helped increase sales-tax collections because of higher prices on goods. But it has also resulted in consumers using more credit, which has drawn recurring concerns from economists in monthly reports.
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