August 29, 2022

Silent Spending: Florida’s Shadow Budget Needs Greater Scrutiny (2022)

Executive Summary

Silent spending, in the form of numerous types of tax expenditures, continues to drain billions of dollars in potential state revenue each year. Total tax expenditures cost Floridians $23.6 billion in Fiscal Year (FY) 2021-22. Since FY 2009-10, the cost of silent spending has increased by $5 billion, with an average annual growth rate of 2 percent.

Unlike money spent through the state budget process, this shadow budget reflects resources that are “spent” through Florida’s tax laws. While spending through the state budget takes the form of collecting revenue and appropriating these dollars to be expended, spending through the tax code  takes the form of revenue the state forfeits. In either case, the result is the same: public resources are designated for a specific purpose.

Stronger evaluation and routine monitoring of such silent spending would give policymakers and the public a better understanding of whether foregone revenue truly benefits Floridians. Evaluation provides the evidence necessary to determine which tax expenditures are serving a public purpose and which are unproductive or waste public resources.

Tax expenditures that are not serving a public purpose or are unproductive should be modified or eliminated. Such action would increase the revenue available for investing in critical services to meet the state’s growing population needs and fund investments that are important for future economic growth. The elimination of unproductive tax expenditures also simplifies the state tax code, makes the tax system fairer, and eliminates unfair business competition.

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