Home  News Local News Tax shortfall could be worse than expected
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Tax shortfall could be worse than expected |
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Monday, 18 August 2008 |
According to reports, the decline in Florida’s tax revenues could be much more significant than was originally projected. It said state economists plan to meet on Friday, August 15 to determine how bad a deficit there will be in the state’s budget as a result of declining sales tax revenues. Estimates are that the state could be faced with a deficit as high as $1.2 billion. To make up such a huge shortfall, Governor Charlie Crist will have two options – one to propose more budget cuts, or to take funds from the state’s capital reserve.
The state Legislature’s chief economist, Amy Baker, confirmed that the estimated deficit could be real, but the exact figure cannot be confirmed until the Revenue Estimating Conference meets to analyze and determine the revenue numbers. However, there are real indications that the unusually high fuel prices that impacted the state since April, did affect the spending power of consumers resulting in less retail purchase. Since April, the state has collected a monthly average of $102 million less in sale tax revenues. Unless there is a significant decline in the price of fuel sold in the state, sales tax revenue will continue to fall.
The state Legislature has already cut $6 billion in the state’s expenditure budget, and further cuts would be devastating to a number of state programs, especially education, which is already reeling from budgetary cuts. Crist has the authority of turning to state reserves of $1.6 billion, but this would need approval from a special legislative budget commission.
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