State Fiscal Briefs

November 2020

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Florida’s budget basics

According to the National Association of State Budget Officers (NASBO), Florida’s total expenditures in fiscal year (FY) 2020 were $91.0 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2020 were $2.3 trillion, ranging from $4.7 billion in Wyoming to $337.7 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Florida’s combined state and local direct general expenditures were $154.1 billion in FY 2017 (the most recent year census data were available), or $7,346 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $9,446.

Florida’s largest spending areas per capita were elementary and secondary education ($1,351) and public welfare ($1,339). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

Florida’s combined state and local general revenues were $156.4 billion in FY 2017, or $7,456 per capita. National per capita general revenues were $9,592. Florida does not levy an individual income tax. Florida’s largest sources of per capita revenue were charges ($1,534), such as state university tuition and highway tolls, and federal transfers ($1,430).

Florida’s politics

Governor Ron DeSantis, a Republican, was elected in 2018 with 49.6 percent of the vote. The next gubernatorial election is in 2022.

Republicans control both the House of Representatives (73 Republicans to 47 Democrats) and Senate (23 Republicans to 17 Democrats). Control of the governor’s mansion and each house of the legislature gives Republicans a trifecta in Florida. All Florida House seats are on the ballot in 2020 because representatives serve two-year terms. Senators serve a combination of two- and four-year terms during each decade’s legislative district apportionment cycle. This 2-4-4 term system ensures all Senate seats are up for election after new legislative district boundaries are drawn. Roughly half the senators are up for election in 2020, and all senators are up for election in 2022. Both members of the House and Senate are term limited and cannot seek reelection if by the end of their current term they will have served more than eight consecutive years in office.

Florida’s budget institutions, rules, and constraints

Florida uses an annual budget. The legislature must pass a balanced budget, but it can carry a deficit over into the following year. Florida further limits annual revenue growth with a budget rule based on personal income. This is a binding rule that requires a legislative supermajority or vote of the people to override. After voters approved Amendment 5 in 2018, Florida now also requires a two-thirds supermajority vote in each chamber of the state legislature for legislation containing any new tax or fee or any increase to an existing tax or fee. There are also limits on total authorized debt and debt service incurred by the state.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Florida’s recent fiscal debates

  • Florida has enacted several tax cuts over the past few years, including reducing vehicle registration fees in 2014, exempting manufacturing machinery from the state’s sales tax in 2016 (HB 7099), and reducing the school property tax rate in 2019. Florida also passed a complex state tax cut in 2019 in response to the federal Tax Cuts and Jobs Act (TCJA). The state anticipated increased corporate income tax revenue because the TCJA also changed the state’s corporate tax base, and HB 7127 requires a refund and rate reduction if revenue increases more than 7 percent. It did, so Florida will send corporations over $500 million in refunds in spring 2020 and reduce its corporate income tax rate from 5.5 percent to 4.458 percent for tax years 2019, 2020, and 2021. Florida also remains one of seven states that do not tax any type of individual income.
  • In 2019, the Florida legislature passed a contentious change to the state’s state’s education voucher program, which allows families to spend public funds on private schools. Former governor Jeb Bush established the first voucher program (the Florida Tax Credit Scholarship Program) in 2001, and additional programs were added in 2002, 2014, and 2018. The 2019 legislation (SB 7070) created Family Empowerment Scholarships, which makes more families eligible for the vouchers by increasing the income eligibility limit from roughly $67,000 to $77,000 (with future increases scheduled) and, for the first time, transferred money from the state’s education budget to the scholarship funds. Previously, vouchers were funded with corporate donations to the state in exchange for tax credits.
  • Governor DeSantis and the Florida legislature increased appropriations for environmental projects in 2019. However, some environmental advocates say the state is still not fulfilling its voter-approved spending obligations on environmental programs. In 2014, Florida voters approved an amendment that dedicated a portion of revenue from a real-estate transfer tax to environmental efforts such as Florida Forever, a conservation and land acquisition program. But advocates claim the state is spending the funds on administrative costs rather than on purchasing and maintaining land. Advocates first challenged the state’s spending in 2015 and are still fighting the state in court.

Florida’s current budget

Governor Ron DeSantis’s FY 2020 budget proposed increased spending on education and environmental programs (particularly Everglades restoration), but his overview and press release mostly highlighted his budget’s planned savings from eliminating government jobs and cutting taxes. Specifically, the governor called for two sales tax holidays (one for back-to-school shopping and one for disaster preparedness) and for significantly reduced property taxes. DeSantis emphasized in his 2019 state of the state address that he will not “spend profligately” and will ensure Florida “remain[s] a low-tax state.”

The legislature passed its budget in May 2019. The enacted budget included new spending for schools and the environment. However, it also cuts spending for the state’s universities. The legislature also approved the governor’s proposed property tax cut and sales tax holidays.

Governor DeSantis released his proposed FY 2021 budget and gave his 2020 state of the state address in January 2020.

For more on Florida’s budget, see