Florida economy strong, even with reliance on federal funds

TAMPA, Fla. (WFLA) — For the latest tax season, the IRS collected more than $4.1 trillion from Americans for the 2021 fiscal year. $13.4 billion was from Florida businesses.

More than $252 billion was collected from Florida taxpayers by the US Internal Revenue Service for 2021. The state of Florida has one of the lowest tax burdens in the country, with no state income tax.

While the state collectively paid in $252 billion between businesses and individual taxpayers, Florida also received $37.7 billion from federal funding for the coming fiscal year, according to the state budget starting in July. The total appropriations budget was $112 billion.

Collectively, 33.6% of Florida’s budget for the 2022 fiscal year came from federal funds. The state also has a reported $20 billion surplus, according to state officials.

In an analysis of state funding and taxes, SmartAsset named Florida as No. 36 in a ranking of state dependencies on the federal government. SmartAsset reported a 36.77% federal share of state revenue, meaning the amount of government revenue coming from intergovernmental aid. Federal jobs account for just under 2% of all workers in the state of Florida, according to analysis of the 2020 US Census.

The Florida Department of Economic Opportunity reports 149,400 federal employees work in the state of Florida as of May 2022.

Using similar data sets, WalletHub also assessed federal aid for dependency and impact. In their report on the states, ranked by dollars put in versus dollars received from the federal government, among other economic factors, WalletHub also compared states based on political party for the 2020 presidential election in contrasted to federal funding received.

When comparing states by which party they voted for in the 2020 presidential election, WalletHub reported Republican-oriented states were more financially dependent on federal funding than the states which voted for the Democratic party. As we know, Florida voted largely Republican in the 2020 election.

Florida has a current population of more than 22 million people. It also has a strong economy, with industries like tourism or hospitality, manufacturing, health services, and finance among its top 10 industries. Taxes paid by Florida workers fund their social security benefits when they retire, as one example of the effect of federal funds in the state.

Additionally, the Florida Department of Children and Families reported that, as of the month of May, 25,574 Florida families are receiving federal assistance through the Temporary Assistance for Needy Families program. There were 39,692 TANF clients in Florida as of May. 4.4 million residents of Florida received Medicaid assistance for their healthcare and about 1.57 million households received food stamp funds in May.

The federal dollars coming into states go towards multiple programs, from roads to food stamps to medical care for the poor. It also includes subsides for housing, education, and other needs across the multitude of sectors and factors that are part of daily life in the United States.

Discussing the allocation of federal funding, Jonathan Haughton, Chair of Economics at Suffolk University, told WalletHub that “it makes sense for some states – those with higher incomes – to subsidize others, rather than allocating federal spending in proportion to taxes collected.”

As of 2022, and based on WalletHub’s analysis of each state’s financial dependency, government dependency, job-market dependency, international trade dependency, and vice dependency, Kentucky remains the state with the largest reliance on the federal government, while Utah is the least dependent . Florida ends up as the 34th most dependent state, according to the analysis by WalletHub.

Solely focusing on state government dependency on federal funds, the state ranks 30th.

Leave a Comment