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Sales taxes remain down in July at Florida tourism suffers amid pandemic

In this drone aerial photo provided by the Florida Keys News Bureau, traffic flows on the Florida Keys Overseas Highway in Islamorada, Fla., towards Key West Monday, June 1, 2020. After being closed to visitors since March 22, 2020, to help curtail the spread of COVID-19, the Florida Keys reopened to tourists Monday. Tourism employs about 45 percent of the Keys workforce. (Andy Newman/Florida Keys News Bureau via AP)
In this drone aerial photo provided by the Florida Keys News Bureau, traffic flows on the Florida Keys Overseas Highway in Islamorada, Fla., towards Key West Monday, June 1, 2020. After being closed to visitors since March 22, 2020, to help curtail the spread of COVID-19, the Florida Keys reopened to tourists Monday. Tourism employs about 45 percent of the Keys workforce. (Andy Newman/Florida Keys News Bureau via AP)

TALLAHASSEE, Fla. – State general revenues came in just above a forecast amount in July, but the coronavirus pandemic continued to hammer sales-tax collections.

Numbers released Wednesday by the Legislature’s Office of Economic & Demographic Research showed general revenues topping an earlier projection by $2.5 million, driven in part by the end of state-approved delays of payments of corporate income taxes and corporate filing fees.

Meanwhile, sales-tax collections for July were $165.2 million below a January forecast. While down, that was an improvement over sales-tax collections that plummeted in April, May and June as the pandemic caused many businesses to shut down or dramatically scale back operations.

“Nearly all of the sales-tax related loss is attributed to declines in the tourism and hospitality-related industries, dropping receipts 37.1 percent below estimate for the tourism sales tax category,” the report for July said. “Even though a significant part of the loss arises from a reduction in the number of out-of-state tourists, this category also includes sales to Florida residents at restaurants, local attractions and other leisure-based activities which have likewise been negatively affected by the pandemic.”

Senate President Bill Galvano, R-Bradenton, advised senators that he remains “hopefully optimistic that our state will fully recover from this unprecedented pandemic.”

“Moving forward, the Legislative Budget Commission will meet in early September to review and approve the constitutionally-required Long Range Financial Outlook,” Galvano wrote to senators Wednesday. “This important document will provide a more holistic view of economic and budgetary factors over the next three years and will serve as an important tool for the Legislature when it reorganizes following the November election.”

Democrats have unsuccessfully called for months for Republican leaders to bring lawmakers back to Tallahassee to address the drop in revenue and its potential impacts on the state budget.

In the latest numbers, corporate income taxes, corporate filing fees and highway safety fees came in a combined $175.1 million above projections. The state earlier had issued orders approving delayed payment of those taxes and fees, according to the report.

Two revenue sources drew some benefits from the current economic environment, the state economists noted. Earnings on investments were up $19.3 million over the forecast due in part to the infusion of federal dollars into the state. Intangible taxes were up $9.1 million with interest rates “ultra-low,” aiding refinancing by homeowners.

With bars closed and restaurants limited in occupancy, beverage taxes were $8.2 million off in the July numbers.

The overall numbers were an upgrade from April, May and June, when the state collected about $2.1 billion less than forecast. The state finished the 2019-2020 fiscal year on June 30 collecting about $1.88 billion below projections.

Earlier this month, state economists lowered an estimate of general revenue for this fiscal year by $3.42 billion and an estimate for the 2021-2022 fiscal year by nearly $2 billion. General revenue plays a vital role in funding schools, health care and prisons.

Gov. Ron DeSantis started efforts to reopen the state’s economy in May, moving most of Florida into a second phase in June. However, the effort slowed as cases spiked in late June.


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