A new study released by the Leroy Collins Institute on Florida’s economic and fiscal health paints a bleak picture of the state’s present and future.
“Tougher Choices: Shaping Florida’s Future,” by UF researchers David Denslow and James Dewey, found that Florida lags behind other states in a wide array of economic and social indicators.
“In a lot of ways,” Dewey said, “Florida is really near the bottom of the barrel.”
As an example of Florida’s economic failures, teacher salaries in the Sunshine State declined at the fourth-fastest rate in the country between 2000 and 2012. Although the unemployment rate in Florida has dropped to 6 percent, down from its recent high of 11.4 percent in 2010, most of the employment gains in the past four years have come from an increase in unskilled, low-wage jobs.
Dewey describes this increase in low-wage jobs as a “polarization.” While other states reap the benefits of new jobs in high-tech industries, Florida has become a haven for low-paying jobs in food service and other unskilled sectors.
As the Florida economy has grown more dependent on these low-paying jobs, economic inequality has also increased. A recent study from the Brookings Institution, a Washington think tank, found that Miami ranked third among all American cities in the greatest disparity between its rich and its poor.
The study also found that Florida’s lack of state income tax and reliance on sales and property taxes puts a disproportionate financial strain on Florida families and small businesses.
Sales taxes are inherently regressive, meaning that those earning less tend to pay a greater proportion of their income. The combination of higher taxes and lower-paying jobs for Florida’s workers spells serious trouble for the state’s economic future.
Regrettably, Gov. Rick Scott and the Republican leadership in the Florida Legislature seem determined to institute policies that would exacerbate the many problems outlined in the report.
Instead of strengthening Florida’s tax base by increasing taxes on large corporations, which would also reduce the financial burden on families and small businesses, Scott has supported completely eliminating the state’s corporate income tax.
One of the few bright spots discussed in the report is the Florida Retirement System, the pension fund for the state’s public employees. Denslow and Dewey argue that the FRS provides a secure source of post-retirement income for Florida workers and should be a “model” for other states.
Republicans in the Florida Legislature have put forth proposals to eviscerate the retirement system.
Legislation supported by Republicans in the Florida Legislature would require new retired public employees to enroll in defined contribution plans. The defined benefit plans currently provided by the FRS guarantee public employees a fixed level of post-retirement income.
The new plans would allow the FRS to sharply cut back on pension benefits, even on employees who have already paid into the system. If enacted, such a proposal could greatly harm the financial stability of thousands of Florida retirees, reducing their disposable income and thus negatively impacting economic growth.
There are many possible solutions. Increasing the minimum wage would provide greater financial security to Florida’s many new low-income workers. Instituting a progressive income tax and increasing corporate taxes would reduce the burden on middle-class families and small businesses.
Unfortunately, the Scott administration and the Republicans who control the Florida Legislature are determined to institute policies that benefit Big Business and the wealthiest Floridians while leaving the middle class and the poor behind. Florida needs a change in leadership to get back on the path toward economic security and prosperity for all its citizens.
[Elliot Levy is a UF political science and public relations junior. His column appears on Wednesdays. A version of this column ran on page 6 on 2/26/2014 under the headline “Republicans to blame for ‘grim’ outlook"]
