Saturday, May 26, 2018
Business

From 'best' to 'worst' run states, Florida fares poorly

How's Florida doing?

You'd think we would know the status of our own state, but it's not so easy to pin down.

Presidential candidate Mitt Romney thought Florida was struggling and said so, over and over, when campaigning here earlier this year.

Where Romney saw decline, Florida Gov. Rick Scott sees improvement.

Who's right?

A new survey called "America's Best and Worst Run States" ranks Florida among the duds, at No. 42 of 50. For the first time, North Dakota is the best run. California is the worst run for the second year in a row, according to the annual ranking done by 24/7 Wall St., a New York-based financial news website.

Why did Florida fare so poorly? The numbers tell part of the story. Florida's median household income of $44,299 was 14th lowest nationwide. That 17 of every 100 Floridians lived in poverty ranked the state 17th highest in that shameful category. And unemployment, measured earlier for this survey at 10.5 percent, tied Florida at the sixth highest.

To be fair, the state's jobless rate has dropped since then and is a full 2 percentage points lower now at 8.5 percent. However, the jobs created pay less collectively than the jobs that were lost.

The survey gets more interesting in its commentary about Florida's ongoing economic overdependence on a real estate market marred by a multiyear drop in home values and high foreclosure rates.

"Florida was easily the state most affected on the east coast by the housing collapse," the survey stated. As of 2011, 15.6 percent of Florida's gross domestic product (GDP) came from real estate, more than all but two states.

Last year, Florida's GDP grew by just 0.5 percent. That's just a third of national GDP growth. And though the state is expected to have a budget surplus in 2012, those gains will "not be enough to restore funding to some of the areas that have seen major budget cuts during the recession, such as education, roads, and environmental programs," the survey noted.

Florida fell between No. 41 Louisiana and No. 43 South Carolina.

The "best run" states, clustered mostly in the upper Midwest and the West, shared certain characteristics. They all have well-managed budgets. Each of the top 10 has a perfect or near-perfect credit rating from Standard & Poor's, Moody's, or both.

Also, there is a "strong correlation," the survey found, between well-educated populations and generally well-managed states. Of the 10 best-scoring states, nine have among the highest percentages of adults with high school diplomas.

The "worst run" states were scattered, from New Jersey and Rhode Island in the East, Illinois in the middle and Arizona and California out West.

Of the 10 worst-ranked states, only three received top scores from S&P or Moody's, and none from both. Poor-ranked states tend to have high debt relative to both income and expenditure.

Bottom line? States often bask in the glory or battle the poor perceptions of surveys.

For Florida, this survey seems right on target.

Too much dependence on real estate? You bet. A desperate need to raise the educational bar? No question.

Sounds like worthwhile New Year's resolutions to me.

Contact Robert Trigaux at [email protected]

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