Florida certainly is a popular place to move to – growing in population the second-most of any state between the 2010 and 2020 census counts. Only Texas grew by more people than Florida. That population growth in Florida is expected to continue higher growth than in most states. The current estimate from the Bureau of Economic and Business Research (BEBR) at the University of Florida is that 24.4 million people will call Florida home in 2030 – an increase of around two million people over the next eight years.
Although Florida is growing in population, not every part of Florida is growing. Between 2010 and 2020, 17 of Florida’s counties lost population. Most of these counties are rural – something that is happening all over the U.S. One of the reasons for population declines is that people leave for better places – often to find work. So, who is left when people leave? – people who may have family responsibilities or fewer opportunities and typically people with fewer skills. What is concerning is that the county taxes still must be collected – so people with fewer opportunities and fewer skills are taxed even more so that counties can stay solvent. So, we need growth because not having growth is a downward spiral to less opportunity and a higher tax burden for those who remain in the areas that are depopulating.
The COVID pandemic has changed migration patterns in Florida, and some of the areas that were depopulating are now benefitting. As more people are not required to report to a specific office every day, there are more opportunities for people to move away from business centers and live where they want. Many Floridians have opted to move away from larger cities and, in some cases, are repopulating smaller towns and rural areas. Those areas with reliable high-speed connectivity are already benefitting, and we know that more areas of Florida will have better connectivity in the future. There are many advantages to this – including those to education and health care, especially in rural Florida.
People who have the skills to work from anywhere are benefitting greatly as they gain market power in the employment market. It is likely that many of those people in other states who can work from anywhere will choose to move to Florida. Our state has the benefits of good weather, beaches, world-class fishing and other attractive amenities along with many direct flights – thanks to Florida’s tourism industry. Besides that, Florida having no state income tax is a big draw for many. It is no wonder that Florida’s population is likely to increase for many years to come. But, with additional growth comes some concerns. Indeed, there are several areas of Florida that are becoming much more restrictive in terms of allowing growth of any type in their region. I often hear the term ‘BANANA’ being used to refer to the groups that don’t want any growth. ‘BANANA’ stands for ‘Build Absolutely Nothing Anywhere Near Anything.’
One of the concerns for growing areas is providing infrastructure. Long-term planning for growth must be a priority, rather than reacting to growth. We know that infrastructure for a growing region is less expensive to provide in advance of people moving in as compared to building it after people arrive. Smart local governments are providing water and sewer, electricity, roads and other infrastructure in advance of growth. However, with the high inflation that the U.S. is experiencing and the overall labor shortage, providing the needed infrastructure and services required is becoming much more expensive.
Some school districts are reporting that their schools are getting crowded or are beyond capacity. Those areas that have increased their population significantly but have not expanded companies and recruited new ones are the most concerned because their tax receipts are not growing as quickly as their expenses are.
What Florida needs to do to help this issue is expand its economic development efforts to create more jobs in Florida. Over the past few years, Florida has not maintained its ability to compete with other states for many of those highly prized competitive projects. Many companies have chosen other states for their relocation because of this reason. That is unfortunate for Florida, and especially for local governments, because the tax revenues generated by businesses are substantial and larger than the tax revenues generated by individuals. The most recent Council on State Taxation (COST) estimates show that Florida businesses paid 52.9% of all state and local taxes. When looking at only the local taxes, the number is 60.6% that businesses pay.
We are fortunate because Florida is not expected to suffer the loss of population over the next few years. But only those regions that plan for growth, keep expanding companies and are successful in recruiting new companies will be able to thrive in the future.