State revenues beat expectations in May
TALLAHASSEE – Florida’s monthly revenues continue to top expectations, aided recently by an increase in tourism-industry tax collections, a new report from state economists shows.
The Legislature’s Office of Economic & Demographic Research this week reported May general-revenue collections came in at $3.6 billion, topping a forecast for the month by $573.8 million, or 18.9%.
“Most remarkable, almost 72% of the total gain for May came from sales tax GR (general revenue),” the report said. “For context, May 2020 was the lowest sales tax collection month during the entire pandemic.”
The May 2021 collections reflected business activity that mostly occurred in April, a period that economists said benefited from people receiving federal stimulus checks. Other factors for the increase included “redirected spending from the hard-hit service sector and some consumers’ ability to draw down atypically large savings that built up during the pandemic,” the report said.
The May numbers marked the 10th consecutive month of exceeding revenue expectations as Florida recovers from the economic fallout of the COVID-19 pandemic.
Economists periodically update revenue forecasts, with the May figures measured against a forecast revised in early April. The May numbers came after revenue topped forecasts for April by $797.2 million, March by $299.6 million, February by $298.5 million, and January by $246.7 million.
Sales taxes make up the largest portion of state general revenue, which is used to fund programs such as schools, health care and prisons.
May revenue figures topped expectations in six sales-tax categories watched by economists, including tourism, which has been hit hard during the pandemic.
Taxes collected from tourism in May exceeded the forecast by 21%, according to the monthly report. For April, taxes from tourism topped the forecast amount by 12.1%.
The tourism industry saw improvement during the first three months of 2021, but the number of visitors was still down 14% from a year earlier, when the state started to grapple with the pandemic.
Second-quarter tourism numbers have not been released, but officials say Florida is better positioned for a recovery because of reopening efforts that started last summer, ahead of many other large states.
Meanwhile, tax collections on consumer non-durable items were up 13.2%in May from the forecast, while collections on automobiles were up 40.6%.
Collections were also above forecast in most other types of taxes that go into general revenue, including corporate-income taxes, documentary-stamp taxes and beverage taxes, according to the report.
Among revenue sources failing to meet expectations were insurance taxes and tobacco taxes.