FGCU economist on Florida’s largest-ever budget

Florida now has the largest budget in its history, just under $110 billion. An economics professor from Florida Gulf Coast University says that, compared to other states, it’s actually pretty small.

Gov. Ron DeSantis says this budget represents the largest-ever tax relief in the state, at $1.3 billion. The budget includes $2 billion in tax cuts for fuel, storm preparation and back-to-school shopping tax holidays. $500 million is being set aside for emergency response.
FGCU economist Victor Claar says Florida is in a good position because an influx of tourists is keeping our revenue stream solid.

“There’s no personal income tax in the state of Florida, so most of our revenue comes from spending and economic activity that happens here,” Claar said. “We get to outsource a lot of the tax bill to shoppers who come here in winter, people who go visit Disney. And we’re really fortunate in the sense that we can get people from other states to shoulder at least some of our tax burden here in the state of Florida.”

In October, Florida plans to eliminate its gasoline tax for the entire month, lowering the price statewide by around 25 cents per gallon in the hope of bringing drivers some relief at the pump. Originally, this tax holiday was supposed to last five months, but the state legislature decreased it to one.

Claar says the month of October was picked because it’s the time of the year when the state won’t miss out on as much gas tax revenue as it would in the winter months, when more people are traveling.

“The gas tax holiday won’t save Floridians a lot of money, it’ll probably be about $40 in the month of October per household,” Claar said. “Again, it doesn’t sound like a lot. But, on the other hand, given that a lot of people are really struggling to make the money work right now, given inflation, every little bit helps.”

Other items included in the budget aim to put more money into the adoption and welfare systems as well as water quality and conservation.