1. Bob McKee Chief Economist Florida Department of Revenue
Revenue Estimating
Bob McKee
Chief Economist
Florida Department of Revenue

2. Topics Discussed Consensus Estimating Conference Process
Revenue Estimating Conferences
Impact Conferences
Development of Local Government Revenue Estimates

3. Consensus Estimating Conference Process
Established in Florida Statutes
Sections to , Florida Statutes
Conference Consists of Principals and Participants
Four Principals. The Principals are professional staff of:
Governor’s Office
Florida House of Representatives
Florida Senate
Coordinator of the Office of Economic and Demographic Research
Participants – any person invited to participate in the Consensus Estimating Conference by a principal
DOR is a participant

4. Consensus Estimating Conference Process
Consensus means unanimous consent of the Principals.
Results of the conferences are official information and are to be used by each state agency and the judicial branch in carrying out their duties under the state planning and budgeting system.
All sessions and meetings of a consensus estimating conference are open to the public.
Process allows for a consistent set of numbers to be used in the development of budget and policy.

5. Conferences Economic Estimating Conference
Demographic Estimating Conference
Revenue Estimating Conference
Education Estimating Conference
Criminal Justice Estimating Conference
Occupational Forecasting Conference
Early Learning Programs Estimating Conference
Self-Insurance Estimating Conference
Florida Retirement System
Actuarial Assumption Conference
Social Services Estimating Conference

6. Economic and Demographic Conferences
Economic Conferences
National Economic Estimating Conference
Florida Economic Estimating Conference
Demographic Conference
The results of these conferences are to be used by all other consensus estimating conferences in developing official information.

7. Revenue Estimating Conferences
Ad Valorem
Article V Fees and Transfers
Documentary Stamp Tax
General Revenue
Gross Receipts/Communication Services Tax
Highway Safety Fees
Impact
Indian Gaming
Long Term Revenue Analysis
Lottery
Monthly Revenue Estimates
Public Education Capital Outlay
Slot Machines
Tobacco Settlement
Tobacco Tax and Surcharge
Transportation Revenue
Unclaimed Property / State School Trust Fund
Note – Underlined conferences indicate those conferences for which DOR is a participant

8. Revenue Estimating Conferences
Multiple forecasts presented for Principals to consider
Typically there are three forecasts considered
Each forecast uses the same economic and demographic inputs
Florida Demographic Conference
National Economic Conference
Florida Economic Conference
Example – Ad Valorem Estimating Conference
Forecast presented by Executive Office of the Governor, Office of Economic and Demographic Research, and Department of Revenue

9. Sessions of the Consensus Estimating Conferences
Governor’s Budget Preparation (Fall)
Legislative Budget Deliberation (Spring)
Long Range Financial Outlook Development (Summer)
Special Impact Conferences – to develop official information which reflects specific changes or proposed changes relating to the area of responsibility of the conference

10. Special Impact Conferences
Review proposed changes to Florida Statutes that have potential revenue implications.
Starting point of analysis is current law, current administration to develop baseline against which impact of change is measured.
Generally meets weekly during session.
Considers both state and local revenue impacts.
Addresses revenue impacts only, as opposed to costs or expenditures:
For the 2013 Legislative Session, there were 22 Impact conferences held and 181 legislative proposals analyzed.

11. Consensus Estimating Conference Results and Workpapers
The results and the supporting workpapers of the various conferences are available online at the website of the Office of Economic and Demographic Research
Conference archives available online from Regular Session 2000 forward
Varies depending upon conference

12. Local Government Revenue Estimates
Motor Fuel
Constitutional Fuel Tax
County Fuel Tax
Local Option Fuel taxes
First 1 through 6 cents
Ninth Cent
Second 1 through 5
State Shared Revenues
Half Cent Sales Tax
Ordinary Distribution
Emergency Distribution
County Revenue Sharing
Municipal Revenue Sharing
Fiscally Constrained Counties Distribution

13. Local Government Revenue Estimates
Local Option Sales Surtaxes
Local Communication Services Tax
Taxable Sales of Transient Rental Facilities
Used to forecast Convention and Tourist Development Tax Receipts

14. Timing to Produce Local Government Revenue Estimates
In order to produce local government revenue estimates, the Office of Tax Research must have:
Completed Measures Affecting Revenues Report for Legislative Session
Measures Affecting Revenue Report includes the impact of all legislation that passed in the session.
Spring Revenue Estimate
Population estimate including changes due to annexations and incorporations

15. Local Revenue Estimates
Statewide Revenue Estimates are starting point
Must convert from State Fiscal Year to local fiscal year for most sources
Motor Fuel estimates – Statewide forecast for gallons
Sales tax related revenue sources – Statewide Sales Tax Forecast
Local Communication Services Tax – Estimate of statewide local option
Transient Rentals – Historic data on collections related to transient rentals
No statewide forecast

16. Estimating Motor Fuel Taxes
Formula based
Constitutional Fuel Tax
County Fuel Tax
Activity Based
Local Option Fuel taxes
First 1 through 6 cents
Ninth Cent
Second 1 through 5

17. Estimating Motor Fuel Taxes Constitutional and County Fuel Taxes
Statewide forecast of Gallons for Motor Fuel and Diesel Fuel
2 cents per gallon for Constitutional Fuel Tax
1 cent per gallon for County Fuel tax
Both Constitutional and County Fuel Tax use same distribution formula
Three part formula
.𝟐𝟓 × 𝑪𝒐𝒖𝒏𝒕𝒚 𝑨𝒓𝒆𝒂 𝑺𝒕𝒂𝒕𝒆𝒘𝒊𝒅𝒆 𝒂𝒓𝒆𝒂 + .𝟐𝟓× 𝑪𝒐𝒖𝒏𝒕𝒚 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 𝑺𝒕𝒂𝒕𝒆𝒘𝒊𝒅𝒆 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 + .𝟓× 𝑻𝒂𝒙 𝒇𝒓𝒐𝒎 𝑪𝒐𝒖𝒏𝒕𝒚 𝑻𝒂𝒙 𝑺𝒕𝒂𝒕𝒆𝒘𝒊𝒅𝒆 .𝟓× 𝑻𝒂𝒙 𝒇𝒓𝒐𝒎 𝑪𝒐𝒖𝒏𝒕𝒚 𝑻𝒂𝒙 𝑺𝒕𝒂𝒕𝒆𝒘𝒊𝒅𝒆
Tax from county based on certified gallons

18. Estimating Local Option Fuel Taxes
Inputs
Statewide forecast for Motor Fuel
Statewide forecast for Diesel Fuel
Local rate adopted
Historic Certified Gallons by County
Population Growth
Local distribution percentages
Established either by interlocal agreement or default formula
Special treatment for Diesel Fuel
Diesel is imposed statewide for the first 1-6 local option and the ninth cent local option
The second 1-5 local option does not apply to diesel

19. Estimating County Revenue Sharing
Inputs
Forecast of State Sales Tax ( 97.9% of funds)
Forecast of Cigarette Tax (2.1% of funds)
Population Estimates
Unincorporated and Countywide
Prior year sales tax collections by county
Formula – Distribution percentage for each county is:
𝑪𝒐𝒖𝒏𝒕𝒚 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 𝑺𝒕𝒂𝒕𝒆 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 + 𝑪𝒐𝒖𝒏𝒕𝒚 𝑼𝒏𝒊𝒏𝒄𝒐𝒓𝒑𝒐𝒓𝒂𝒕𝒆𝒅 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 𝑺𝒕𝒂𝒕𝒆𝒘𝒊𝒅𝒆 𝑼𝒏𝒊𝒏𝒄𝒐𝒓𝒑𝒐𝒓𝒂𝒕𝒆𝒅 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 + 𝑪𝒐𝒖𝒏𝒕𝒚 𝑺𝒂𝒍𝒆𝒔 𝑻𝒂𝒙 𝑪𝒐𝒍𝒍𝒆𝒄𝒕𝒊𝒐𝒏𝒔 𝑺𝒕𝒂𝒕𝒆𝒘𝒊𝒅𝒆 𝑺𝒂𝒍𝒆𝒔 𝑻𝒂𝒙 𝑪𝒐𝒍𝒍𝒆𝒄𝒕𝒊𝒐𝒏𝒔

20. Estimating County Revenue Sharing Guaranteed Entitlements and Growth Revenues
Two Guarantees
First Guarantee
Amount received in State Fiscal Year
Second Guarantee
Amount received in State Fiscal Year
Growth Money – Revenues available, if any, after first and second guarantees are met
Special Distribution for Consolidated County
$6.24 x County Population
Reduces funds available before distribution percentages applied.

21. County Revenue Sharing Steps in Calculating Distributions
Step 1 - Calculate Amount based on distribution formula.
Step 2 - Compare distribution amount to First Guarantee amount to ensure Guarantee is met.
Step 3 - If First Guarantee is met, compare distribution amount to sum of first and second Guarantee.
Step 4 - If either First or Second Guarantee is not met for any county, subsequent funds are reduced to allow for the Guarantees to be met.
Step 5 - Calculate available growth money. Growth money is funds available after Guarantees are met.
County Revenue Sharing has historically had sufficient funds to meet the First and Second Guarantee for all counties, thus resulting in all counties receiving the amount from the distribution formula.

22. Municipal Revenue Sharing
Inputs
Statewide Sales Tax (73.37% of Funds)
Statewide Estimate for Municipal Fuel Tax on Motor Fuel (26.61% of Funds)
Statewide Estimate of Alternative Fuel User Decal Fee (.02% of Funds)
Population Estimates – Municipal and County
Sales Tax Collections – County Level
Municipal Taxable Value of Real and Personal Property
Guaranteed Entitlement
Prior Year Local Government Half Cent Distribution

23. Municipal Revenue Sharing Formula
𝑨𝒑𝒑𝒓𝒐𝒕𝒊𝒐𝒏𝒎𝒆𝒏𝒕 𝑭𝒂𝒄𝒕𝒐𝒓 =
𝑷𝒓𝒐𝒑𝒐𝒓𝒕𝒊𝒐𝒏 𝒐𝒇 𝑨𝒅𝒋𝒖𝒔𝒕𝒆𝒅 𝑴𝒖𝒏𝒊𝒄𝒊𝒑𝒂𝒍 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 + 𝑷𝒓𝒐𝒑𝒐𝒓𝒕𝒊𝒐𝒏 𝒐𝒇 𝑫𝒆𝒓𝒊𝒗𝒆𝒅 𝑴𝒖𝒏𝒊𝒄𝒊𝒑𝒂𝒍 𝑺𝒂𝒍𝒆𝒔 𝑻𝒂𝒙 𝑪𝒐𝒍𝒍𝒆𝒄𝒕𝒊𝒐𝒏𝒔 + 𝑷𝒓𝒐𝒑𝒐𝒓𝒕𝒊𝒐𝒏 𝒐𝒇 𝑴𝒖𝒏𝒊𝒄𝒊𝒑𝒂𝒍𝒊𝒕𝒊𝒆𝒔 𝑹𝒆𝒍𝒂𝒕𝒊𝒗𝒆 𝑨𝒃𝒊𝒍𝒊𝒕𝒚 𝑻𝒐 𝑹𝒂𝒊𝒔𝒆 𝑹𝒆𝒗𝒆𝒏𝒖𝒆𝒔 𝟑
Each of these terms have substantial sub-calculations. These are not discussed further in this presentation.

24. Steps in Calculating Municipal Revenue Sharing
Step 1 – Determine statewide amount available.
Step 2 – Determine the Apportionment Factor for each municipality.
Step 3 - Calculate distribution amount based on apportionment factors for each city, including new cities.
Step 4 - Compare Formula Amount to Guaranteed Amount.
If Guaranteed Amount exceeds Formula Amount, municipality receives Guaranteed Amount.
Step 5 – Compare Formula Amount to amount received in , if Formula Amount is less than amount received in , municipality receives amount received in
Step 6 – If funds are remaining, a growth distribution is calculated for eligible municipalities.

25. Steps in Calculating Municipal Revenue Sharing
Step 7 – Calculate Section (3) Distribution
Replacement funds for reduced Local Government Half Cent Revenue Sharing Funds (2003)
Step 8 – Sum Distributions to get total by Municipality
Unlike County Revenue Sharing, there are cities that do not receive growth money due to Steps 4 and 5.
This also means there are cities that receive less than their formula amount.

26. Local Government Half Cent Revenue Sharing Program
Inputs
Statewide Sales Tax Forecast
Historic Sales Tax Collections by County
Population Estimates
Municipal
Unincorporated area
Countywide

27. Local Government Half Cent Revenue Sharing Program
Step 1 – Forecast state sales tax by county.
Step 2 – Determine amount to be distributed to local government entities by county.
Step 3 – Determine split between cities and counties using statutory formula.
Step 4 - Determine Emergency Distribution amount and distribution. (Not discussed in Presentation)
Step 5 - Determine Supplemental Distribution amount and distribution. (Not discussed in Presentation)

28. Half Cent – Municipal Share
Municipal Formula for any given city. The result is applied to the total half cent from activity that took place in the county.
𝑴𝒖𝒏𝒊𝒄𝒊𝒑𝒂𝒍 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 𝑪𝒐𝒖𝒏𝒕𝒚 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 + 𝟐 𝟑 × 𝑪𝒐𝒖𝒏𝒕𝒚 𝑰𝒏𝒄𝒐𝒓𝒑𝒐𝒓𝒂𝒕𝒆𝒅 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏

29. Half Cent – County Share
County Formula for any given county. The result is applied to the total half cent from activity that took place in the county.
𝑪𝒐𝒖𝒏𝒕𝒚 𝑼𝒏𝒊𝒏𝒄𝒐𝒓𝒑𝒐𝒓𝒂𝒕𝒆𝒅 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 + 𝟐 𝟑 × 𝑪𝒐𝒖𝒏𝒕𝒚 𝑰𝒏𝒄𝒐𝒓𝒑𝒐𝒓𝒂𝒕𝒆𝒅 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 𝑪𝒐𝒖𝒏𝒕𝒚 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 + 𝟐 𝟑 × 𝑪𝒐𝒖𝒏𝒕𝒚 𝑰𝒏𝒄𝒐𝒓𝒑𝒐𝒓𝒂𝒕𝒆𝒅 𝑷𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏

30. Local Option Sales Surtaxes
Inputs
Estimate of Sales Tax Collections by County (from Half Cent Estimate)
Historic differences between half cent collections and local option sales tax collections by county
Used to estimate impact of $5,000 cap
Default Formula (same as half cent formula)
Interlocal Agreements (if any)

31. Local Option Sales Taxes
Step 1 – Take Estimate of Sales Tax Collections at county level used in Half Cent Estimate.
Step 2 – Calculate implied Sales Tax Base.
Step 3 – Calculate impact of $5000 cap at county level.
Step 4 – Calculate countywide total for a hypothetical 1% levy.
Step 5 – Apply default formula percentages for cities and counties. The default is the distribution percentages calculated for the half cent.
Step 6 – Calculate Interlocal agreement percentage, if applicable. Please note – the Department calculates these based on how the interlocal agreement directs us to distribute the funds.

32. Local Option Sales Taxes
Things to consider
The estimate is produced based on a hypothetical 1% levy. If your county has a local option sales tax different than 1%, the estimate can be scaled accordingly.
The estimate for distribution between cities and counties is based on the half cent formula. Not all authorized sales surtaxes require the proceeds be shared with cities. Be certain that the surcharge in place in your county is shared before relying on these estimates.
The amount reported as the interlocal agreement percentages is based on how the interlocal agreement directs the Department to distribute the funds.
In certain counties, the interlocal agreement directs DOR to distribute 100% to the Board of County Commissioners (or the County Clerk), who then further distributes to the various entities that receive distributions.

33. Local Communication Services Tax (CST)
Inputs
Forecast for statewide Local CST
Historic CST Collections by Jurisdiction
Historic CST Local Rates
Population
Municipal
Unincorporated Areas
Audit Adjustments
Current CST Rate

34. Local Communication Services Tax (CST)
Step 1 – Calculate Historic CST Tax Base by Jurisdiction
Step 2 – Calculate Historic CST Base per capita
Step 3 – Estimate CST Base per capita for forecast period
Step 4 – Apply current local rates to calculate estimated local tax revenues
Step 5 – Layer on known audit adjustments for past and coming periods

35. Local Communication Services Tax (CST)
Notes on CST
Only local tax forecast at the municipal level. All other local sources are forecast at the county or statewide level and distributed to various jurisdictions by formula.
Estimate does not include revenues from Local Discretionary Surtax conversion rates.
Estimate does not include revenues from CST on Direct to Home Satellite that are distributed back to local governments through the Half Cent Revenue Sharing Program or the Fiscally Constrained County Distribution.

36. Transient Rentals
Tax Base for Tourist and Convention Development taxes
Estimate is of Tax Base rather than Tax Collections
Steps in Estimating
Step 1 – Identify historic tax revenues by county from Transient Rental Activity
Step 2 – Convert to Tax Base by dividing by local tax rate
Step 3 – Apply forecast growth rate for Tourism and Recreation category from General Revenue Estimating Conference
Step 4 – Allocate growth to county level based on historic growth

37. Questions?
Contact information
Bob McKee
Chief Economist
Office of Tax Research
Florida Department of Revenue
(850)