Florida Goes Underground


By Richard Reep

Last year’s report that Florida had lost people marked a new low in our state’s boom-and-bust history. But this autumn’s news seems to surpass even that sorry milestone with a combination of sluggish tourism, empty state coffers, and a reputation as one of the top real estate foreclosure states. Florida just can’t seem to get out of its own way, and with the fourth highest population in the country, it could have competed with Texas to replace California as one of the best business climates in the nation. Instead, Florida, which boasts one of the lowest tax rates in the nation, continues to see businesses and citizens depart, with newly elected governor Rick Scott recommending even lower taxes as the best solution. Instead, it is high time that Florida fix its real problems of economic monoculturalism and anti-education policies that drive it further and further away from America’s future potential.

It is no secret by now that a diverse income source is the only way to survive the Millenial Depression. States that have more than one income source, like Texas, were able to adapt policies to favor resilient businesses and industries. In Florida, despite loud and clear input to the state legislature, no change in state policies have been effected this year, once again making tourism and construction growth the focus of job creation.

The tourism industry knows well its position as “first in, last out” when a recession hits, diversifying its products and geography, enabling at least something to run while everything else stands idle. Thus Marriott International, in the late nineteen eighties, invested in senior living facilities, which bore well through the 1990-93 recession. Regulatory burdens on this market segment eventually caused Marriott to focus on other, less regulated markets, and today its global diversity has caused the company to remain economically sustainable. Florida, with so much sunk cost in tourism, seems unaware that its former tourism dominance has been quietly replaced by such glittering destinations as Brazil, Dubai, and China.

Agriculture is, of course, Florida’s economic mainstay: even in a recession, people must eat. This industry, however, employs a whopping 44,000 farmers, about a month’s worth of laid-off Florida workers. Clearly, the state should be looking elsewhere to create jobs.

Governor-elect Scott’s vague promise to increase state venture capital spending while cutting taxes is amusing, in light of similar promises from past politicians. While the state’s Capital Formation Act has attracted investment in biomedical clusters, it takes a great deal of spending to sustain this fund. Similar promises created tax incentives for the film industry, which built studios in the nineteen nineties. Then, when the going got rough, these subsidies evaporated, and the studios promptly moved to New Mexico.

The money for such schemes comes from the same place that Florida politicians seem to always find money: the education system. Florida, after struggling to get up to 27th in spending per pupil, seems about to find out what it is like to be 50th. And this is a last place finish the state should avoid.

An educated population can adapt more easily to the changing times, can more competently choose its leaders, and can create wealth for itself. None of these qualities have been demonstrated by Floridians in recent years (think of the 2000 election) and, if the newly elected leadership has its way, none are likely to spring forth in the near future either.

Florida’s two best hopes are to invest more in its public education system, not less, and to diversify its economy. Recent immigrants from states like Wisconsin and New Jersey, where schools are well funded and taken seriously, express shock and dismay at the public schools in Florida. While states like New York debate the worth of comprehensive assessment tests, Florida has been busy distilling its education system down to a teaching-the-test model, producing little else but test results. Regaining an educated, aware citizenry is critical if the state is to see a future as a contributor to the nation’s recovery.

The potential to diversify its economy remains strong in Florida. Instead of lowering taxes, however, the new state leadership would do well to consider a more guided regulatory approach that favors a diverse economy. Come and gone are many industries which could return with the right incentives: aviation training, movies and television, solar energy research, and the space program. Research, manufacturing, and commercial jobs in all of these industries could contribute to a rebirth of Florida and spark investment that would produce lasting results.

Florida’s tax climate favors business, but is oddly mismatched by its regulatory climate. The dodged a bullet with the failure of Amendment 4 – a proposal that all new development would have to face a public vote – and the state’s development industry congratulated itself heartily on this success. This proposal made the ballot because of the cumbersome development process regulated by the state’s Department of Community Affairs, which has widely been perceived to fail at its task, protecting neither nature nor the quality of life for its citizens. Whether or not the new governor gets his wish to eliminate this bloated state bureaucracy remains to be seen, but regulatory reform in the state’s development codes needs to be in the works.

And tourism, which has been a great economic engine, has a chance to come back. Florida will always be a destination, and while other world places have leapfrogged ahead, tourism is highly competitive, as destinations age rapidly. The enduring romance with Florida will continue, but its famous beaches and theme parks will need to reinvent themselves bigger and better than ever. With a new Legoland in the design phase, and redevelopment at some of the world’s most hallowed ground in the Magic Kingdom, tourism’s long-term future bodes well.

The smoke has cleared from the election battles. Now, more than ever, Florida’s leadership should be nurturing a more educated citizenry and reforming its regulatory system, rather than keep its tax system at ultra-low levels, to pull itself out of this nosedive. Florida’s natural advantages in climate and accessibility make it ideal for such a wide variety of businesses that very little should stand in its way to diversify the economy and create a productive, vibrant, educated workforce.

Richard Reep is an Architect and artist living in Winter Park, Florida. His practice has centered around hospitality-driven mixed use, and has contributed in various capacities to urban mixed-use projects, both nationally and internationally, for the last 25 years.

Photo by Captain Kimo

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The post about Florida, one of the busiest cities in America is worth reading. It describes about the financial and trade related scenario that exists in Florida in the recent times. Its economy and trade is getting low nowadays .But reports suggest that these are all small coverable issues when gone through its past history.search here

This has always been

This has always been Florida’s problem. They need to reinvent those places and make it more inviting that it is before without getting out the historic presence or particular place. Tourism is the biggest opportunity to reach higher that they get for past years that I believe is not that high then. They can build fountain and construct pedestrian bridge which lovers love to pass by for its romantic feeling with all the lights and green plants that adds refreshing feeling. All they can do is use their creativity to create unique and inviting attractions to capture tourist attention.

My personal opinion is that

My personal opinion is that Florida should learn from Queensland. They managed to increase the number of tourists by using proper marketing and advertising. They also have quality services to offer.

Other reasons of Florida troubles

Florida's troubles began with a 400% increase in homeowners insurance (hurricane) for housing in the vicinity of the coasts before the recession, that eventually finished off the marketplace. For residents that lived on fixed income this was too much for many to afford and a migration began northwards to "Half-Back" the region around Charleston South Carolina, halfway between Miami & New York. Charleston offered OK weather, ocean, and low cost housing without the insurance problems.

Today, Florida is under an additional attack from developers who approach cities to submit plans. Many city and county "planning staff" mandate only a singular solution - New Urbanism tight grids. It does not matter what the developer wants to build, what the market wants, or what is economically or environmentally sound - bring in anything other than a tight dense new urban grid and the planning staff will not recommend approval. This eliminates any hope of innovative solutions that are more functional, attractive, affordable, livable, safer, more efficient, and less costly. In other words the consumer considering a move to a new home in Florida would not have a choice other than a high density development surrounded by concrete and parked cars with any green space either at a huge premium price or a 5 to 10 minute "walk" away... or that sun seeker can have plenty of choices in other States that have planning staff that is open to more sustainable solutions and creating vibrant neighborhoods that eliminate monotony.

To me the second problem is the current one that will most determine if Florida can survive after the recession.

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The insurance is being correctly priced

Florida is subject to attack from hurricanes on most sides as a result insurance rates had to rise to handle having the house destroyed every 30 years or so. (3% premium rates) You have to pay for the good climate somehow. (California would have the same problem if lenders required earthquake insurance, but they do not). Living anywhere on the East Coast one should likley have the same rates, but if you do a state average the inland folks cover a lot of coastal exposure in most other states.