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Florida Gov. Rick Scott answers questions after a meeting of the Florida Senate Finance and Tax Committee on Jan. 11, 2016. (Tampa Bay Times photo) Florida Gov. Rick Scott answers questions after a meeting of the Florida Senate Finance and Tax Committee on Jan. 11, 2016. (Tampa Bay Times photo)

Florida Gov. Rick Scott answers questions after a meeting of the Florida Senate Finance and Tax Committee on Jan. 11, 2016. (Tampa Bay Times photo)

Joshua Gillin
By Joshua Gillin February 4, 2016

Scott says state revenues are growing after tax cuts

Gov. Rick Scott’s $1 billion tax-cut request is giving the Florida Legislature plenty to chew on, especially after state economists warned that revenues won’t be as high as once thought.

Scott wants a range of cuts, including a reduction in the sales tax on commercial rents and a $770 million break for manufacturers and retailers by getting rid of their corporate income tax. Despite concerns over how the size of his request will affect the budget, Scott was confident the math makes it an easy decision for lawmakers.

"We have plenty of money to be able to do tax cuts," Scott said Jan. 20, 2016, after state economists warned tax revenues would be less than previously estimated. "Let's look at history. We've cut taxes 50 times and look what has happened to our revenues. They've grown."

Scott has used this line repeatedly in recent weeks. We wondered whether revenues have continued to grow even as Tallahassee has passed tax changes over recent years.

Revenue roundup

Scott’s line about 50 tax cuts is a talking point that just keeps on growing. We have rated claims about him cutting 24 tax cuts, 40 tax cuts, and more than 40 tax cuts, Half True, because Scott counted many small tax changes for specific industries as overall tax cuts.

What’s new this time around, in a nutshell, are 16 provisions passed in 2015, most of which were part of a $429 million tax-cut package. The full list is largely comprised of esoteric tax credits (mostly for businesses), changes in unemployment compensation and sales tax holidays. There also was a rate reduction on the Communications Services Tax on cellphone and cable service that amounts to about $21 per $100 on a bill and a $60,000 cap on taxes for boat repairs.

Several of those may help businesses, but really don’t often do much for everyday Floridians, especially if they needed to collect unemployment. Many times, local governments may raise taxes to make up for their own lost revenue.

In short, it’s arguable whether all of those qualify as tax cuts, but they did have an impact on how many tax dollars the state brought in. Economists told us, however, that while you can project how much year-over-year revenues may be changed from cuts, it’s tough to attribute any concrete economic growth to those changes.

Because of overall economic growth, tax revenues have been rising since Scott became governor as the state was climbing out of the Great Recession. We surveyed several years of general revenue, which is funded by taxes and fees and can be used by the Legislature for any purpose, alongside the state's rate of economic growth.

Fiscal year

General revenue

Growth rate

2008-09

$21 billion

-12.8 percent

2009-10

$21.5 billion

2.4 percent

2010-11

$22.55 billion

4.8 percent

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2011-12*

$23.6 billion

4.7 percent

2012-13

$25.3 billion

7.2 percent

2013-14

$26.2 billion

3.5 percent

2014-15

$27.7 billion

5.7 percent

2015-16

$28.4 billion

2.1 percent

(*Scott’s first full fiscal year in office) Source: Florida Office of Economic & Demographic Research

State economist Amy Baker noted that even with Florida’s economy growing, that growth rate is currently below the state’s historical average, and the cumulative effects of prior tax changes are eating into revenues more than expected.

State budget forecasters have announced that tax revenues will come in at $400 million less than previously expected. Scott’s office has rejected those figures in pursuit of his biggest round of tax cuts, saying the Legislature has plenty of money to play with.  

But while it’s apparent that revenues have gone up even as Scott’s tax changes have been implemented, experts said it’s tough to directly link them. They said there are three main reasons Florida’s revenues have grown during the nationwide recovery: Population growth, rising property values and overall inflation.

More than 1 million people have moved to Florida since 2010, property values are recovering from the housing bust, and inflation makes tax collections go up as costs go up. Basically, more people are paying more taxes on things that cost more.

Norton Francis, senior research associate with the Urban-Brookings Tax Policy Center, said that despite being the third-largest state, the growth rate for Florida’s tax revenues has started to lag behind the national average.

"What you need to look at is, are (tax revenues) growing more than they used to?" Norton asked. "It could be that it’s come back as a whole, but it’s hard to pin that to a tax cut."

Our ruling

Scott said, "We've cut taxes 50 times and look what has happened to our revenues. They've grown."

Scott has a debatable definition of tax cuts, but the state’s tax revenues have increased since he took office. Economists told us it would be difficult to attribute growth specifically to tax changes. The national economic recovery, population growth, higher property values and inflation are the major factors for the state’s growth.

The statement is accurate but needs clarification or additional information. We rate it Mostly True.

Our Sources

Tampa Bay Times, "A predicted $400 million drop in revenue could scuttle Gov. Rick Scott's tax-cut plan," Jan. 20, 2016

U.S. Census Bureau, "Florida Passes New York to Become the Nation’s Third Most Populous State, Census Bureau Reports," Dec. 23, 2014

PolitiFact Florida, "Rick Scott says he cut taxes 'more than 40 times'," March 3, 2015

South Florida Sun Sentinel, "Lawmakers pass $429 million tax-cut package," June 16, 2015

Florida Office of Economic & Demographic Research, "General Revenue Fund Financial Outlook Statement," July 13, 2015

Florida Office of Economic & Demographic Research, "General Revenue Fund Financial Outlook Statement," August 14, 2015

Florida Office of Economic & Demographic Research, "Long-Range Financial Outlook, Fiscal Years 2016-17 through 2018-19," Fall 2015

Tampa Bay Times, "Gov. Rick Scott will seek $1B in tax cuts from Florida Legislature," Nov. 5, 2015

Florida Office of Economic & Demographic Research, Florida Demographic Estimating Conference results, Dec. 1, 2015

Florida Office of Economic & Demographic Research, "General Revenue Fund Financial Outlook Statement," January 19, 2016

PolitiFact Florida, "2015 cell phone tax cut adds up for Scott," Jan. 25, 2016

Urban Institute, State Economic Monitor, accessed Jan. XX, 2016

Florida TaxWatch, "General Revenue and Trust Funds," accessed Jan. 27, 2016

Interview with Amy Baker, Office of Economic & Demographic Research coordinator, Jan. 25, 2016

Interview with Norton Francis, Urban-Brookings Tax Policy Center senior research associate, Jan. 26, 2016

Interview with Chris Lafakis, Moody’s economic analyst, Jan. 26, 2016

Interview with Lauren Schenone, Scott spokeswoman, Jan. 26, 2016

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