Increasing Florida Real Estate Tax Revenues Mean State Budget Windfall

Before taking up residence in the governor’s mansion, Jeb Bush was a successful real estate developer. Now, the Florida chief executive is benefitting politically from the actions of others — and the housing boom that has taken the state by storm. Thanks to a bounty of new tax receipts, Bush is projecting a $70.8 billion budget next year.

Bush made a fortune buying and selling commercial real estate with his partner, developer Armando Codina. With an already eye on his legacy, the departing two-term governor is using his newfound budget windfall by spending freely on schools, social programs and the environment, all the while dishing out a record $1.5 billion in tax reductions.

As he begins his eighth and final year in office, a look inside the numbers shows that much of Florida’s new black ink is rooted in its land. According to the Orlando Sentinel, revenue from real estate taxes will soar to $3.5 billion this year — a remarkable 300 percent increase since Bush left the development business to seek political office in 1999.

Widespread Florida real estate sales and new constructions also are pumping up sales tax revenue for the state, which makes up its biggest source of revenue. As new homeowners buy refrigerators, furniture and other high-priced items to stock those dwellings, the big winner is the Sunshine State itself. The latest budget recommendation is roughly double what Bush, by all accounts a fiscal conservative, first proposed in 1999.

“I came into office with some guiding principles, and we’ve applied them to the budget, but we’re a dynamic place. Times change,” Bush said. “It doesn’t always happen just the way you want it.”

This year’s budget packs substantial political clout. As the governor plans a $570 million cut in property taxes, most homeowners stand to pocket this cash when those bills make their annual arrival in November — right about the same time voters will be choosing Bush’s successor. If you don’t think it’s entered Bush’s mind that he can persuade Florida voters to assure the next occupant of the governor’s mansion also is a Republican, well… you must not follow politics.

But, there’s no question that Florida homeowners can use the extra cash, too. With Florida home loan rates expected to rise throughout the year, the state’s booming economy may fall short of expectations set by recent years.