By Tom St. Myer
The state budget is growing as rapidly as the population in Florida. But what happens when the growth finally slows down?
Florida TaxWatch Executive Director Tony Carvajal spoke on that topic and dozens of others related to the budget on Friday at the Greater Pensacola Chamber Legislative Luncheon. Carvajal offered his expertise from 36 years of strategic planning, nonprofit management and business leadership.
The Florida economy is booming as the population continues to skyrocket. Florida is the fastest-growing state in the country with an average growth of over 900 people per day, and its economy is the 15th largest in the world. Sales tax is the primary revenue source at $28 billion. Next is motor fuel taxes at $2.8 billion.
“For 29 straight months, (our economy) has been growing and it’s not just regular growth,” Carvajal said. “We have been growing faster than the estimates of the smart people who say, ‘this is what our target is.’ They have adjusted it five different times, and we’re still exceeding (estimates).”
To align with that economic growth, Gov. Ron DeSantis is proposing a $114.8 billion budget this legislative session. That is an increase of almost $5 billion from last year and about $45 billion from just 10 years ago.
“Where does this normalize?” Carvajal said. “It’s great to have a growing economy, but not necessarily a growing state budget. If we are not careful when the days of reckoning come in, we have to worry about how we balance that out.”
Carvajal explained how the money is budgeted. He said health and human services account for about half of the budget and that Medicaid alone is about one-third of the expenditures. Another quarter of the budget is devoted to education. He noted the budget calls for an increase in the level of reserves from $12 billion to about $15.7 billion.
The proposed budget includes about $2 billion in tax cuts. Permanent reductions include baby and toddler necessities, gas stoves and over-the-counter pet medicines. One-year reductions include children’s books, toys and athletic equipment, oral and dental hygiene, cosmetics and toiletries, household items for less than $25, ENERGY STAR appliances and pet foods.
“These are not just giveaways,” Carvajal said. “These are ways we can get dollars back in consumers’ hands and each of you is probably touched directly or directly by some of these things.”
Any form of tax relief will be welcomed by the hundreds of thousands of Floridians who barely earn enough to pay for housing. Carvajal said the state under invested in the building of houses over a 10-year period and the proposed budget incentivizes rehabilitation of properties and expansion of workforce housing.
“There are more than 825,000 people in this state right now who are burdened with housing issues,” he said. “That means they’re either paying way too much on a day-to-day basis or they don’t have a place to live.”