Silent spending, in the form of numerous types of tax expenditures, continues to drain billions of dollars in potential state revenues each year. Total tax expenditures will cost Florida in excess of $20 billion in Fiscal Year (FY) 2018-19, which is an increase of more than 10 percent over the previous year.
State tax expenditures are not inherently good or bad. The problem with them is, unlike spending through the budget, which is subject to yearly review and reauthorization, spending through the tax code is not routinely evaluated to ensure it is delivering on objectives that support the state’s families, communities and economy. Once enacted, these expenditures tend to remain in law without an expiration date or regular review.
The elimination of unproductive tax expenditures would simplify the state tax code, make the tax system fairer and eliminate unfair business competition.
Enacting measures that make it very difficult to address ineffective tax breaks, such as requiring a two-thirds (supermajority) vote of each chamber to increase a state tax or fee, institute a new state tax or fee or eliminate a tax exemption or credit, would impede investment in K-12 education, affordable health care and other public services that benefit all Floridians.
Silent spending, also known as “tax expenditures,” is spending through the state tax code rather than through the budget process. Special provisions in the state tax code exempt revenue collection from some taxpayers and activities. These provisions reduce potential state revenues by notcollecting taxes as opposed to collecting and then appropriating them through the state budget. The ultimate impact on the state budget is the same as appropriation and annual expenditure of public funds.