For those who may have missed the final result, Florida’s extended Legislative Session concluded with a $115.1 billion legislative budget and a $2.0 billion tax package. The tax package included $1.3 billion in state taxes and $700 million in local taxes. Governor DeSantis signed the budget on June 30. However, he also announced $376 million in line-item vetoes, resulting in a net budget of $114.8 billion while creating hefty fiscal reserves of $12.6 billion.
Florida TaxWatch analyzed the budget, which revealed several key achievements. The Florida Education Program and Higher Education received $38.4 billion ($9,130 per K-12 student). The Business Rent Tax was repealed, providing $1.3 billion in savings. The Medicaid/Kid Care budget in the health and human services area was $36.5 billion, and the Back-To-School sales tax holiday was made permanent, with $215 million this year in consumer savings.
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The debt reduction efforts were also impressive. Debt reduction included $580 million for this year and a cumulative $7.3 billion in tax-supported debt retired since 2019. Environmental investments exceeded $4 billion, spread across various water and conservation projects that protected Florida’s water quality. State workers got a 2% pay raise, and additional pay increases were provided to state law enforcement officers and firefighters, assistant state attorneys, and public defenders.
The only thing the Florida Legislature is constitutionally required to do is pass a budget. However, at the end of the regular session, the Senate and House chambers could not agree and were tussling with two quite different tax relief proposals. Both chambers promoted significant tax relief but differed on how much and the right relief path to take. So, the session was extended. Eventually, common ground was achieved, producing significant tax relief and healthy reserves. The reduction in state debt was accelerated.
Those who desired more spending reduction were somewhat stymied by local Member projects, which amounted to over $2 billion; the new budget contains 1,700 such projects.
We understand it was a very acrimonious Legislative Session, which resulted in a relatively small number of bills passed: 255. Most business leaders will tell you this is probably a good thing because it means businesses are saddled with fewer regulations and red tape. But all the bickering did leave some good legislation unfinished.
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Early in the Session, the big tax issue seemed to be property taxes. The legislative leadership and the Governor had all said they wanted to lower property taxes, possibly eliminating or replacing them. Many bills were proposed dealing with such taxes, and the Governor proposed a $5 billion homestead property tax rebate. However, as the session continued, the focus on tax relief shifted to sales tax. Significant changes to the state’s property tax system may be coming. A legislative committee has been appointed to study property taxes over the summer and to develop proposals for significant property tax relief, including proposed constitutional amendments that could be considered at committee meetings this fall.
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