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State Tax Collections Over Estimates

June 24th, 2009 by Mike Vasilinda

For the first time in almost three years, Florida sales tax collections exceeded economists estimates. The news comes on the heels of another report showing homes sales in the state are increasing. As Mike Vasilinda tells us, the welcome news is too new to proclaim a recovery is underway.

Clara Pitts drove out of this parking lot with a new 32 inch High Def TV in her back seat, but not before we talked with her.

I try not to participate in the recession, Pitts said.

Claras purchase added just under 40 dollars to the state treasury. In the month May the state collected 17 point 4 million dollars more in sales taxes than economists expected.

This is the first time since September 06 that collections have actually exceeded the estimate.

Economists have yet to analyze which sectors improved, but Attorney

General Bill McCollum says the news is welcome.

I can tell you this, we need that sales tax revenue. It means that people are spending again, McCollum said.

The positive news comes as unemployment continues to rise, but economists say that is not unexpected.

Unemployment rates are a lagging indicator. So unemployment rates can clearly increase even after a recession is determined to be officially over, state economist Rebecca Rust said.

And we met other shoppers not as confident as Clara. When shopper Marlene Childers was asked if she was more confident in the state of the economy, she had this to say.

Not a whole lot, no,” Childers said.

A one month jump doesnt make a trend, and even though more money was spent than expected, the sales tax collections were still 300 million dollars less than May a year ago.

Economists says a jump in revenue over a three or four month period would be a positive sign the economy is improving.

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