You won't hear this from Gov. Rick Scott, but the federal budget shutdown is having a negative effect on Florida's tax revenues and capital investment.
That is the conclusion of the business-backed research group, Florida TaxWatch, in a report released on Tuesday. The report, titled What the Government Shutdown & Debt Ceiling Crisis Mean to Florida, offers a general overview of the impacts the extended shutdown is having on Florida's economy with one bottom line: state revenues will drop.
The increasing uncertainly in the financial markets has reduced consumer confidence levels, "resulting in less spending and decreased investment, which are vital for economic growth and sustainability,'' the report notes.
"Tourism, retail and Florida industries that rely heavily on capital investment will be the first to feel the effects of a government shutdown," said Dominic M. Calabro, President and CEO of Florida TaxWatch. "Since Florida collects 70 percent of its revenue through sales and use taxes, decreased purchasing activity will negatively impact the state budget." The estimated $845.7 million in new revenue projected by budget analysts could dry up -- leaving less for the governor and legislative leaders to use to increase education spending, provide $500 million in tax breaks and expand business investment -- all promises the governor has already made for the election-year budget cycle.
"The general downside of the shutdown and debt ceiling crisis is that it may cause a drop in state revenue collections, a risky situation for Florida's upcoming budget projections,'' writes TaxWatch. "...The loss of revenue from an extended shutdown could reduce these estimates Florida National Parks and other federally operated facilities have closed, impacting businesses that rely on the tourism industry."
For his part, Scott has refused to say what impact the shutdown will have on Florida and he has remained silent on whether he supports or opposes the House Republican's efforts to link resolution to changes in the Affordable Care Act.
"The governor believes Washington needs to compromise across party lines to pass a budget, just like we do in Florida,'' said Jackie Schutz, Scott's spokeswoman, on Tuesday.
As for the impact the debt ceiling crisis could have on the state, the only answer the governor's office will provide is "we are assessing impacts."
The business-backed voices of the state, however, have reached a conclusion: "The general downside of the shutdown and debt ceiling crisis is that it may cause a drop in state revenue collections, a risky situation for Florida's upcoming budget projections."