For the 2023 regular session, policymakers have a chance to pass worldwide unitary combined reporting (HB 769 / SB 1144), which would raise between $1 to $1.5 billion.
COVID-19 has hit Florida with an unprecedented public health crisis that has exposed and worsened social inequality, triggered an economic recession, and left the state with an extraordinary fiscal challenge ahead. As Florida policymakers prepare to address a pandemic-related budget shortfall totaling at least $5.6 billion over the next several years, they will need to make smart revenue choices to build a brighter future for all Floridians. Now is not the time for austerity. Policymakers risk prolonging and deepening Florida’s fiscal challenges by relying on cuts to taxes, public spending, furloughing public employees, cutting state contracts to businesses and nonprofits, and reducing assistance to counties, cities, and families with low income.
Despite the size of future budget shortfalls, it is possible to make up hundreds of millions of dollars without cuts. Making strategic revenue-raising choices now will help Florida weather times of financial crisis, make the tax code fairer, and provide a down payment on programs and policies that make Florida a great place to live, work, and visit.
One major problem is Florida’s upside-down tax system, which is one of the most regressive in the nation. Our state is known as a “low-tax” state, but in fact, Florida is a high-tax state for low- and moderate-income residents. Floridians with the lowest incomes pay the most in state and local taxes, while the wealthiest pay the least, as shares of household income.
The majority of Florida’s revenue — about 80 percent — is generated by the sales tax. The Florida Office of Economic and Demographic Research estimates that 13 percent of all general revenue comes from tourism-driven sales tax collections.
During a press briefing held on April 28, 2020, our CEO Sadaf Knight shared FPI’s finding that, contrary to comments by Florida legislative leaders, funding provided to states under the federal CARES Act could not be used to help fill revenue shortfalls. Outlets across the state picked up the story, including WPTV, Florida Politics, WESH Orlando, and Bay News 9.
On June 19, 2020, FPI sent a letter to Governor DeSantis, along with 35 groups, urging Governor DeSantis to preserve hard-won budget priorities, like teacher raises. One of our recommendations to preserve budget funding was for state leaders to identify common-sense measures to raising state revenue.
Then, in August, the Miami Herald published an FPI op-ed urging state leaders to turn to revenue-raising solutions, like closing corporate tax loopholes, to make the tax code more equitable and to prevent further budget cuts.
A well-designed revenue system is essential for maintaining Florida’s economic health. An effective tax code supports a thriving community's building blocks, such as the environment, housing, infrastructure, public health, safety net programs, and education. Just as important, a fair tax code ensures that everyone contributes their share to maintain these building blocks.
There is a way to generate the revenue our state needs that does not put the greatest weight on everyday Floridians. By implementing 14 common-sense measures, lawmakers could raise more than $3.5 billion in revenue.
