Florida Should Listen to CFO Jimmy Patronis’ Warnings About State Revenue

Despite serving as state fire marshal and working to ensure first responders have access to Personal Protection Equipment (PPE), Florida CFO Jimmy Patronis hasn’t exactly been on center stage during the coronavirus pandemic. While Patronis doesn’t have the best of bully pulpits at this time, he is raising an important issue that Floridians should be paying more attention to during the current crisis.

Patronis has offered warnings about how the pandemic is impacting state revenue. Last week, Patronis talked about with Florida Department of Revenue (DOR) Executive Director Jim Zingale about how coronavirus can impact the Sunshine State’s revenue, noting how the economic slowdown can impact things in Tallahassee.

“With Florida’s tax base heavily reliant on sales and corporate income taxes, I am concerned about state revenues,” Patronis said on Thursday. “Additionally, as public services become more heavily relied upon in times of crisis, I’m concerned about the impacts to the state reserves that took so many years to build up. We’ll continue working with the Department of Revenue in acquiring important information on state revenues, and I want to thank Executive Director Zingale for his leadership during this crisis, as we work to get families safely through this pandemic and back on their feet.”

Patronis is spot on with his concerns–especially as the state continues to rely on tourism, real estate, lodging, retailers and restaurants, all sectors which have been hit hard during the pandemic, for revenue.

The state CFO has been focused on the issue for at least a few weeks now. Three weeks ago, he sent a letter to Gov. Ron DeSantis, state Senate President Bill Galvano, R-Bradenton, and state House Speaker Jose Oliva, R-Miami Lakes, on the need to convene the Revenue Estimating Conference (REC) as he warned about the impact of the pandemic on the state’s finances.

“I believe considering the COVID-19 pandemic the REC should convene to ensure there is sufficient revenue to pay for fiscal year 2020-2021. We all share in a constitutional obligation to ensure the state can raise sufficient revenues to finance the appropriations prerogatives of the Legislature,” Patronis wrote. “I applaud the governor’s support of small businesses in these urgent times by suspending professional licensure renewal requirements, but the resulting delay in trust fund revenue is just one example of the economic impact this virus is having on our state finances, and we are still in the early stages of defeating COVID-19.”

Patronis also noted that he served in the Florida House during the Great Recession.

“After serving in the House during the financial crisis, I am familiar with the difficult choices that must be made as a result of unexpected revenue shortfalls. The financial projections for our state have dramatically changed from what they were at the beginning of the FY 2021 budget making process. Our current year budget (2019-2020) is also likely to be affected by the mass shutdown and closures forced by COVID-19,” Patronis wrote. “We are at war in many ways with an unseen enemy, and a time of war is a time of uncertainty. Our job is to be as conscientious as possible when spending Florida taxpayer money. This means the REC must work quickly to make new projections based on new information. The State Board of Administration (SBA) should weigh-in and make an assessment about Florida’s AAA credit rating as it could be affected by spending from the rainy-day fund or the assumption of more state debt – either of which could be an option for COVID-19 spending.”

That’s a tough message for many voters and elected officials to hear, especially after a decade of unprecedented prosperity in Florida and with politicians on both sides of the aisle in Washington, D.C. calling for unprecedented spending. However, it’s a necessary one. The economic impact of coronavirus will be felt in Florida long after the virus recedes, however and whenever that takes place. That’s something Patronis understands–and one of the reasons why officials, public servants and voters across the state should listen to his warnings about state revenue.

 

Kevin Derby wrote this column. He can be reached at kevin.derby@floridadaily.com.

 

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