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 $20 billion in Fiscal Year (FY) 2018-19, are not comprehensively evaluated to determine whether or not the benefits outweigh the costs. The Florida Policy Institute (FPI) looks at this issue in its annual report, Silent Spending: Florida’s Shadow Budget Needs Greater Scrutiny (FY 2018-19), and makes the case for closer examination of these costly expenditures.
“Silent spending” is spending through the state tax code instead of the budget. Special provisions in Florida statute exempt revenue collection from some taxpayers and activities.
“We all want high-quality public schools, affordable housing and thriving neighborhoods,” said Joseph Pennisi, executive director of the Institute. “Yet there are tax preferences that have been in place for thirty-plus years, free of any analysis, collecting dust in Florida’s tax code. In many cases, the revenue we are losing to exemptions and credits could be redirected to public services that will improve the quality of life for our families.”
The cost of Florida’s tax expenditures from FY 2014-19, notes the report, roughly equals the state’s $88.7 billion budget for the coming fiscal year.
The Institute found that total spending on tax expenditures for FY 2018-19 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, Department of Agriculture and Consumer Services, State University System and Department of Elder Affairs.
The report urges Florida lawmakers to adopt legislation incorporating tax expenditure evaluation into the annual budget review process.
Additionally, FPI points out the pitfalls of any measure that would make it more difficult for lawmakers to remove exemptions and credits that are ineffective.
“If the Sunshine State puts a system of evaluation in place for this ‘silent spending,’ it will provide residents and lawmakers a clearer look at the true cost of tax expenditures and allow for more informed decision-making,” added Pennisi.
The 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.