Florida Gov. Ron DeSantis signed the $116.5 billion budget for fiscal 2023–24, which includes a $2.7 billion tax relief package and a debt reduction package.
The general revenue portion of the budget is $46.1 billion, while the state’s reserves come in at $15.3 billion, 13.2% of the total budget for the fiscal year.
Fla. Gov. Office
The “Framework for Freedom Budget” provides a record $2.7 billion in tax relief for residents, including both permanent and temporary tax cuts. The state’s per capita state tax collections of $2,264 ranks as the third lowest among all states, according to Florida TaxWatch.
“We have stayed the course and put the individual freedoms of Floridians at the forefront of every decision, resulting in low unemployment, record tourism and a thriving economy,” DeSantis said at a press conference in Fort Pierce.
The budget passed by the Legislature last month didn’t include some provisions that would have accelerated the state’s efforts to shrink its debt portfolio.
Lawmakers had considered a plan that provided for the early retirement of some state debt and would have created a state investment fund and debt-reduction program. About $200 million was included in the plan to reduce outstanding debt, half of what the governor wanted.
“I am disappointed the Legislature didn’t pick up the debt-reduction program,” Ben Watkins, the state’s director of bond finance, said last month. “I thought that was really a fundamentally sound proposal but they didn’t take it up, it didn’t get any traction.”
Watkins said, however, it was a step in the right direction, despite the cut in the request.
“While it’s not the $400 million that was asked for, it is still a significant amount — $200 million is a significant amount. So I applaud their efforts for doing that,” he said.
Florida’s general obligation bonds are gilt-edged, holding triple-A ratings from Moody’s Investors Service, S&P Global Ratings and Fitch Ratings.
Florida TaxWatch looked at the state’s unfunded pension liabilities.
Based on the reduction of the investment return assumption to 6.7% from 6.8% by the FRS Actuarial Assumptions Estimating Conference last year, the unfunded actuarial liability of the Florida Retirement System’s defined benefit program amounted to $38.3 billion on June 30, 2022, the TaxWatch report said.
“Based on an actuarial liability of $217.4 billion and an actuarial value of assets of $179.2 billion, the program is 82.4% funded as of June 30, 2022,” the report said. “The Framework for Freedom Budget fully funds the required employer contributions to ensure the long-term solvency of retirement benefits our state employees, particularly our law enforcement officers and teachers, rely on.”
The state’s $15.3 billion in reserves consist of $6.8 billion in unallocated general revenue, $4.1 billion in the budget stabilization fund, $1.7 billion in unallocated trust funds, $500 million in the emergency preparedness and response fund and $2.2 billion in the reinsurance assistance and the Florida optional assistance programs.
The DeSantis administration set a four-year goal of investing $3.5 billion to preserve the environment and he pointed to the progress that has been made in that area.
“I think this is the strongest environmental budget we’ve ever had,” DeSantis said at the press conference. “This budget has a total of $7.3 billion between environment, agriculture and natural resources, including $1.6 billion for the Everglades and water quality projects.”
DeSantis, who announced a run for the Republican presidential nomination in 2024 earlier this month, has been traveling the country touting the state’s economic success and blasting progressive ideals.
The governor vetoed about $510.9 million of items in the budget, which displeased some lawmakers.
“While I am appreciative of the governor’s approval of the bulk of local projects I sought, I am very disappointed in the number of those projects both in my district and elsewhere he cut from the multi-billion-dollar spending plan,” said State Sen. Bobby Powell, D-West Palm Beach.
“For many of these communities, state assistance represents a lifeline in funding critically needed projects, everything from water improvement to law enforcement safety gear, from flood drainage to veterans’ assistance,” Powell said. “In a year in which Florida was flush with cash thanks largely to President Biden and federal assistance, these communities should have had a higher priority as the governor weighed the projects he chose to financially support.”
Separately, the Florida Department of Economic Opportunity reported Friday the state unemployment rate in May was steady at 2.6% for the fifth straight month. The rate remained the lowest in May among the 10 largest states in the nation for the 12th month in a row and is 1.1 percentage points below the national rate of 3.7%.
In May, Florida’s private-sector employment increased 3.9%, or by 17,200 jobs, from the previous month. It rose 3.9%, or by 323,400 jobs, over the year, faster than the nation’s private-sector job growth rate of 2.7% during the same time period.
“Florida’s economy continues to encourage both job seekers and job creators, with a private-sector job growth rate exceeding the nation’s for 26 consecutive months,” said J. Alex Kelly, Secretary of the DEO.
In May, Florida’s labor force rose 2.3%, or by 246,000, from May 2022, faster than the national labor force growth rate of 1.5% in the same period.
Over the month, Florida’s labor force grew 0.3%, or 38,000 jobs, triple the nation’s labor force growth rate of 0.1% in the same period.
Year-over-year, Florida’s private-sector job growth rate has exceeded the nation’s for 26 straight months. In May, total private-sector employment increased 0.2%, or by 17,200 jobs, from April.
The education and health services sector gained the most jobs among all major industries in May, adding 8,800 jobs from the previous month, followed by professional and business services, with 6,200 jobs added, and leisure and hospitality, which added 3,700 jobs.
Regionally, the Miami metro area’s May unemployment rate was 2.2%, down 0.3 percentage point from 2.5% one year ago. The area’s labor force rose 0.1% on the year to 1.36 million. The industries gaining the most jobs in the year were education and health services, adding 15,300 jobs, and professional and business services, adding 12,700 jobs.
The Orlando area’s unemployment rate was 2.7% in May, down 0.1 percentage point from 2.8% one year ago. In May, the area’s labor force on the year increased 3.5% to 1.47 million. The Orlando metro area led other metro areas in job gains over the year in leisure and hospitality, adding 28,800 jobs.
Data continued to show that many job opportunities remained available last month, with more than 450,000 jobs posted online, DEO said.