TALLAHASSEE, Fla. (Cap News Services) – Florida’s budget is highly dependent on more than $6 billion a year from tourism-related activities.
The budget approved Thursday in the state Capitol is based on revenue estimates made before the Coronavirus began impacting the economy.
Its highly likely lawmakers will have to return in the months ahead to either slash spending or raise taxes or both.
Theme parks are closed, bars shuttered, restaurants restricted to half capacity.
Market analyst Brett Ewing said it is a looming problem.
“I do think its going to be a tremendous impact on the Florida economy. I mean, that’s a lot of commerce and spending that’s not going to happen,” said Ewing.
The first signs of trouble showed up this week.
“Since last Thursday, we’ve seen over a 100 percent increase in unemployment claims,” said Ken Lawson, head of the Florida Department of Economic Opportunity.
The Problem: Tourism is a $500 million a month revenue source for the state.
The budget is based on a revenue estimate developed in January.
Lawmakers have set aside $3.9 billion in reserves.
“So that our government can continue to operate at full capacity if revenues decline as a result of the virus,” said Senate Budget Chairman Rob Bradley.
Florida TaxWatch is calling on the Governor to veto hundreds of millions in projects.
“The vetos are just simply going to be different today than they would have had this budget come out two months ago. I don’t see any way around that,” said Governor Ron DeSantis.
And as the virus shifts more spending to the internet, Florida TaxWatch President Dominic Calabro said lawmakers must finally come to grips with collecting tax already owed on remote purchases.
“Not taxing and collecting those taxes is a seven and a half to sometimes eight percent advantage to out of state retailers,” said Calabro.
Following the 2008 financial collapse, the Legislature had to come back in January 2009.
It cut $1.6 billion in spending and raised taxes on licenses by a billion dollars.