A new report from the Florida Policy Institute examines the state’s tax expenditures and makes the case for reviewing and evaluating them against competing state priorities on a regular basis
LAKE MARY, FL – The Florida State Legislature scrutinizes spending for public services annually, yet each year tax expenditures, which are projected to exceed $18 billion for Fiscal Year (FY) 2017-18, are not comprehensively evaluated to determine whether they are serving an important public purpose. The Florida Policy Institute (FPI) looks at this issue in its newest report, Silent Spending 2017-18: Florida’s Shadow Budget Needs Greater Scrutiny, and makes the case for closer examination of these costly expenditures.
“Silent spending” is spending through state tax code instead of the budget. Special provisions in the state’s tax statutes exempt revenue collection from some taxpayers and activities.
“Florida is underinvesting in public education, affordable housing, health care and its environment,” said Joseph F. Pennisi, executive director of FPI. “While spending on public services is examined by the Legislature in its annual budget process, spending on tax expenditures escapes meaningful public scrutiny.”
According to state estimates, over the past five fiscal years, tax expenditures have cost Florida $83.7 billion, more than the current $82.4 billion state budget.
While these costs are routinely estimated, the potential benefits of this spending remain unquantified and, in many cases, unspecified. This fact renders meaningful cost benefit analyses impossible when trying to prioritize among competing calls on state resources.
The report finds that total spending on tax expenditures for 2017-18 equals the combined appropriations to the following agencies/departments: Office of Early Learning, Department of Corrections, Department of Children and Families, Agency for Persons with Disabilities, Department of Health, Department of Environmental Protection, State Court System, Department of Highway Safety and Motor Vehicles and the State University System.
In last year’s silent spending report, FPI found that Florida’s assortment of tax expenditures was projected to cost the state $17.7 billion in FY 2016-17.
“Not all tax expenditures are bad– the problem is that there is no metric used to evaluate their effectiveness,” said Pennisi. “If there is no clear economic or societal purpose being served, then shouldn’t this money be invested instead in services that benefit all Floridians? I strongly urge Florida lawmakers to pass a bill that will require the systematic and periodic evaluation of tax expenditures, and establish a process to do so.”
The Florida Policy Institute is an independent, nonpartisan and nonprofit organization dedicated to promoting widespread prosperity through timely, thoughtful and objective analysis of state policy issues affecting economic opportunity.