Florida TaxWatch budget plan adds $1.5B in revenue, subtracts $4B in spending

(The Center Square) – Florida TaxWatch (FTW) has lobbied lawmakers for two years to adopt an e-fairness bill and secure a Seminole gaming compact to capture nearly $1.5 billion in annual revenue that, essentially, is being left on the table.

Those two budget-boosters remain among 2021 priorities in dealing with the state’s projected $2.7 billion two-year funding shortfall, the Tallahassee-based taxpayer watchdog said last week in a statement highlighting the recommendations from its June Roadmap for a Responsible Recovery report.

Florida is one of seven states that doesn’t require retailers to remit sales taxes from online purchases and the only state that hasn’t changed online sales tax collection laws after a U.S. Supreme Court ruling in 2018 that allowed states to compel remote sellers to remit sales taxes.

House Bill 15, filed by Rep. Chuck Clemons, R-Newberry, would require online retailers that sell at least 200 items, or $100,000 worth of goods, the previous calendar year to remit Florida’s 6% sales tax.

Adopting HB 15 would allow Florida to join “the rest of the nation” in collecting “taxes already owed,” which “could bring in $700 million annually” for the state.

FTW again is calling on legislative leaders to hasten gaming contract negotiations with the Seminole Tribe.

The Seminoles stopped making $350 million in annual payments when the pact expired in May 2019. Attempts to reach a potential $750 million accord have failed over disagreements over banked-card games, online gaming and legal sports gambling.

FTW’s analysis also identified more than $4 billion in spending cuts lawmakers could ponder in facing a forecast fiscal year 2022 revenue shortfall of $2 billion, including controversial proposals to defund member projects and suspend state employee and teacher pay increases.

The report outlines 18 actions lawmakers can take for fiscal 2022, including 12 to reduce spending and six to maximize existing revenues. Among them:

• Rescind appropriations for member projects and nonrecurring appropriations for one-time projects, saving $575 million to $675 million;

• Eliminate $286.9 million appropriated for Other Personal Services’, employees in state agencies governed by the State Personnel System, which FTW estimated could save $143 million;

• Place in reserve an across-the-board percent of General Revenue funds. Release would require a budget amendment with a detailed operational work plan. FTW estimated at 5%, it would build state reserves by $1.7 billion;

• Sell bonds to fund more capital improvements with interest rates low and an anticipated decline in gas tax revenues. This could save state $1.17 billion, FTW estimated;

• Postpone salary increases for state employees and teachers that went into effect Jan. 1 until July 1 if “a budget shortfall cannot be remedied through other means.” This would divert $180 million to $300 million into the General Fund.

Fiscal 2022 actions that promise “significant” savings include eliminating state positions that have been vacant for more than 90 days, requiring state agencies to sustain 1-to-7 ratio of managers-to-employees and ensuring state prison inmates remain Medicaid-eligible.

FTW’s analysis also forwarded 14 proposed “long-term” recommendations, including 12 to reduce spending and two to increase revenue. Among them:

• Explore “centralizing the state’s procurement function within the Department of Management Services,” saving taxpayers as much as $1.4 billion;

• Enroll new Florida Retirement System (FRS) members into the Defined Contribution Investment Plan to ensure FRS is actuarially sound and “avoid billions in future liabilities.” FTW estimated the move could save taxpayers $2.7 million a year, or $9.8 billion over 30 years.

Recommended “long-term” actions that offer “significant” savings included considering a “judicial safety valve” to all judges’ discretion, a “compressed” four-day workweek and taking inventory of “all unnecessary and underutilized capital assets to determine which can be put up for sale.”

Disclaimer: This content is distributed by The Center Square