Florida TaxWatch reports that the General Revenue Estimating Conference has revised earlier estimates, reducing expected collections by $131.9 million in the current year (FY 2016-17) and by $131.1 million for the next budget year (FY 2017-18).
Even with the reduced estimates, collections for FY2016-17 are about $1.0 billion (3.6 percent) higher than the previous year and growth of $1.35 billion (4.6 percent) is expected in FY2017-18.
“While FY 2016-17 collections are higher than the previous year, the budget outlook for FY 2017-18 is getting tighter and will make legislators’ jobs a bit tougher in the 2017 Legislative Session” said the non-partisans research institute that’s based in Tallahassee.
This news is tempered by the good news that collections in FY2015-16. which ended June 30, exceeded the previous estimate by $50.6 million.
Why the reduction in estimates?
“Back in July, estimators adopted national and state economic forecasts that reflected worries stemming from Brexit and mixed signals from employment data. This resulted in a less optimistic economic outlook that served as the basis for the GR estimates. Estimated sales tax revenues were revised downward by $434.9 million over two years. Slowing mortgage refinancing activity also led to decreased documentary stamp tax estimates of $68.2 million. Due to limited opportunities for strong earnings in the current interest rate environment, the state can now also expected lower earnings on its investments, resulting in a $40.4 million reduction in estimated GR earnings.”
See August 2016 Budget Watch report.