General revenue collections continued to top expectations in June, as the state closed out a fiscal year that saw a jump in tax dollars.
A report posted Friday by the Legislature’s Office of Economic & Demographic Research said the state collected nearly $4.664 billion in general revenue in June, $432.4 million more than had been forecast. It said the state collected about $47.33 billion in general revenue during the 2022-2023 fiscal year, which ended June 30, up from $44 billion in the previous year.
General revenue, which includes money such as sales taxes, is closely watched because it plays a major role in funding education, health care and prisons. State economists update projections periodically during the year, with the most-recent forecast issued in March.
The June monthly total was $432.4 million than had been projected in March. Also, the year-end total was $1.08 billion more than had been forecast in March. In June, for example, sales-tax collections were 11.1 percent higher than anticipated for the month
As has been repeatedly the case in recent months, economists fretted in Friday’s report about issues such as lagging consumer savings. The report said the personal savings rate in Florida “continues to be subpar at 4.3 percent.”
By comparison, in 2019, the last full year before the COVID-19 pandemic, the average personal savings rate stood at 7.9 percent. The rate jumped to 33.7 percent in April 2020 as federal money was distributed to help people during the early stages of the pandemic.
While Florida’s labor market remains robust and the U.S. economy expanded by 2.4 percent in the April-to-June period, parts of Florida continue to see higher inflation than the rest of the nation. Friday’s report noted that “persistent inflation conditions … ultimately suppress collections as consumers begin to spend more money on non-taxable necessities like food and health care.”
Meanwhile, sales taxes from tourism, auto sales and documentary-stamp tax collections on real-estate transactions topped the March forecast.
The Florida Department of Commerce said July 21 that the construction sector in June had a monthly increase in jobs for the first time in 2023. Construction job losses had been attributed to rising mortgage rates affecting demand for new housing, mostly in South Florida.
With a target of 2 percent inflation, the Federal Reserve last Wednesday approved an interest rate hike that put borrowing costs at their highest level in more than 22 years.
As it released housing data this month, the industry group Florida Realtors said the housing market “showed signs of continued stabilization of statewide median prices and improving inventory levels.”
“Florida’s economy and lifestyle continue to attract people who want to live and work in the Sunshine State — about 1,218 people move here per day, according to Census data,” Florida Realtors President G. Mike McGraw said in a prepared statement. “The need for homeownership opportunities remains high, but increased borrowing costs, statewide inventory that is still below pre-pandemic levels and other factors continue to affect market activity.”
The industry report said closed sales of existing single-family homes statewide during the second quarter of 2023 were down 11.2 percent from the previous year and existing condo-townhouse sales were off 17.7 percent in the same time.
Florida Realtors Chief Economist Brad O’Connor pointed to the typical interest rate on a 30-year fixed-rate mortgage going from about 5 percent in June 2022 to between 6.5 percent and 7 percent in June 2023.