Florida's fiscal strength lags most other states report finds
More than four years after the Great Recession officially ended in June 2009, the financial condition of Florida and most other states is improving but it remains far from where it was on several key measures of fiscal health, according to a new report by The Pew Charitable Trusts' Fiscal 50: State Trends and Analysis.
The report examined tax revenues, employment rates, debt ratios and reserve funds and compared the fiscal health of each of the states. Florida fared worse when it comes to tax collections and employment but better in terms of reserves and debt.
According to the report, Florida collects 21 percent less in tax revenue’s as of June 20, 2013 than it did during its pre-recession peak, giving the state significantly less spending power than it had seven years ago. Only Alaska and Wyoming are further behind in restoring their tax collections to pre-recession levels, the report found, while Arkansas saw the least dip in its tax collections of any other state, followed by Illinois and Minnesota.
Florida's employment rate is also among the worst in the nation, the report found. The report measured the number of people ages 25-54 in the work force before the recession and again in 2013. It found that the 2007 employment rate in Florida was 81.1 percent and, in 2013, it was 74.8 percent, the third largest drop of any other state, behind only Nevada and New Mexico. Nationally, the average drop was 4.1 percentage points. Meanwhile, Florida's reliance on federal dollars as a share of state personal income continues -- like other states -- to be the highest in history. Federal funds have largely driven growth in total state spending over the past two decades and, despite efforts by Gov. Rick Scott to routinely reject federal funds for numerous spending needs, that pattern is not changed.
Federal dollars make up 36.3 percent of all state revenue, up from only 1.6 percent since 1992. But during that time, federal funds have offset a drop in state funds which have have decreased by 1.4 percent as a share of the total state budget.
The state with the highest share of federal dollars is Mississippi with 48.8 percent -- mostly because of its high federal Medicaid payment rate -- and the lowest is Alaska with 24 percent, which relies on oil revenues for most of its income. The average share of federal dollars as a percent of the state budget is 34.7 percent and only 10 states had less than 40 percent.
One area where Florida is stronger than most other states is its pension and retiree health care costs, which are funded at higher rates than most other states. The biggest burden is the state's public debt from bond issuances and other state borrowing, which is $37.1 billion, according to the report. The unfunded pension cost is $26.9 billion and the unfunded retiree health care costs is $4.5 billion.
Florida also compares well when it comes to its reserve account. According to the report, the number of days most states could run tapping just its general funds is 29.9 days but Florida, with its $3 billion in reserve, could operate for 43.8 days.