Janet Adkins: Florida’s Economy and State Budget
The following is a letter to editor from State Representative Janet Adkins.
Since the end of the legislative session in early May, I have given more than a dozen presentations on the legislative session. Time and again, I have been asked, "How do you feel about the budget?" It is important as we look at the state budget, that it is viewed in the context of our economy, so I would like to share with you some information regarding
This year only two states expect revenue collections to come in above budgeted forecasts (Wyoming and North Dakota), while thirty-eight states expect revenue shortfalls. This past fiscal year alone, forty-two states (including Florida) were forced to reduce enacted budgets by over $31 billion. Compare this to 2002 and 2003, when 37 states were forced to make mid-year budget reductions totaling $14 billion and $12 billion respectively.
Florida's growth is now decelerating. Our state gross domestic product now ranks forty-eighth in the country, down from 2005 when it ranked second. Florida's economy, and its tax revenue structure, is built on growth. It's reliance on these growth industries is the reason Florida has been hit so hard by the downturn in real estate.
In normal years there are approximately 50,000 homes for sale around the state at any one time. Today economists indicate there is an additional 300,000 homes for sale. This overhang, coupled with the decelerating growth in the state, means it will take many, many months before this inventory can be cleared and real economic growth begins.
Since January of 2008, Florida's unemployment rate has been consistently higher than the national average. Florida's unemployment in May reached 10.2%, the highest level since 1975. The unemployment rate in Duval County rose to 10.2% in May; almost double the 5.4% rate from one year ago. Our national economy has lost over seven million jobs since the recession began in December 2007.
This year our state budget totals $66.5 billion, roughly the same amount as last year's budget. Compared to our budget high of $73.8 billion in 2006/07, this might seem low. But compared to the 2000/01 budget of $45.4 billion, you can see that there has been quite a bit of growth over a relatively short period of time. Our state's reliance on growth to fuel our economy has left us with a narrow economic base that must be widened as we work to shape the new economy.
An improving economy will take hard work and a team effort. Consumption will no longer drive economic growth and prosperity. This will be achieved through productivity gains and becoming more competitive in attracting business to the sunshine state.
We will need to create regional comparative advantages. Specialization and a skilled workforce will allow us to create productivity gains and will make our community attractive to new investment and growth. We must rethink our policies as we move forward in this changing economy.
Competing for second homeowners, new small businesses and tourism dollars will be essential to ensure our local economy remains vibrant and prosperous. It is clear that the economy is shifting gears and local communities will need to work closer together in order to compete for the new opportunities that lie ahead.
I believe that job creation and job preservation are critical to our long-term economic recovery and stability. We must look to diversify our state's economy and rely less on growth. People will continue to seek the sunshine state; however, now it will be different reasons that bring them to our shores.
We need to invest our time and energies in strengthening our families, supporting our local merchants and begin sharing ideas on how we can compete and retain jobs. Each job is important to the success of our economy and I will continue to work towards solutions that will help us be a leader in innovation and to compete in the new economy.