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Storms create lucrative times

For six weeks, the rhythm of Gov. Jeb Bush's hurricane-relief speeches have had a familiar cadence. He expresses empathy, then thankfulness and finally optimism.

"We'll get through this, and this will be a faint memory," Bush said Saturday as Hurricane Jeanne became the fourth hurricane to threaten Florida. "This does come to an end."

His optimism is more than feel-good politics, it's based on economic precedent.

Some financial watchers anticipate that within a year or less Florida could see a multiyear economic upswing because of the billions of dollars in reinvestment that is headed for the state.

Short-term, such recovery is hard to fathom. Families are homeless, individual businesses are reporting heavy losses and the state's top two industries, agriculture and tourism, are floundering after an unprecedented four hurricane hits in one season.

Indeed, some economists are far more skeptical of Florida's future, saying economic optimism might be misguided in a state where infrastructure is damaged in several locales, making recovery more difficult.

Which view is right all depends on whether Florida's economy falls into what has been a postdisaster pattern.

History shows that short-term losses sustained in a hurricane generally are eclipsed long-term by the extensive rebuilding that follows, financed by insurance and the federal government. Construction creates thousands of jobs, insurance provides for billions in consumer purchases and new facilities built to higher standards might help offset future storm-related losses.

"Obviously some businesses and some individuals will not benefit (from an upswing)," said economist Hank Fishkind, founder of the Orlando firm Fishkind and Associates.

"But somewhat ironically, all the aggregate measurements of economic activity _ income, job creation, construction _ all tend to go up after a storm."

Among the evidence that Wall Street still believes the Sunshine State is a good bet: Moody's Investors Services on Tuesday issued a Aa2-rating for a $200-million school construction bond being sold by the state.

The rating falls in the category that is one-step below Moody's "gilt-edge" rating of Aaa that is reserved for bonds with the lowest level of investment risk.

Damage of this magnitude is "unchartered territory for us," Moody analyst John Incorvaia acknowledged.

"But what may be a short-term detriment, everyone expects will be a long-term benefit."

Adding to Moody's and others optimism: Florida's state government, flush with more than $2.3-billion in reserves, isn't expected to need to raise taxes or cut this year's services to cope with its anticipated $1-billion in recovery costs.

Even with the storms, September collections of documentary stamps _ taxes charged on real estate transactions _ have continued to beat state economists' estimates. As of Wednesday, the state had collected $215-million for the month with more collections to come. That soundly beats the monthly estimate of $153-million and approaches last year's September collection of $233-million.

What's more, the storms' timing, early in the fiscal year and several months before the 2005 property tax valuations will be made, improves the financial picture by providing some time for rebuilding efforts to offset revenue losses for business and government.

Legislative leaders are talking about providing financial relief for local governments or individuals needing help.

And while tourism is suffering, some loss has been mitigated by the thousands of relief workers who have flooded the state.

After Hurricane Andrew, a Category 5 storm, decimated southern Miami-Dade County in 1992, state economists say the state netted more than $690-million in additional sales tax revenue over the next three years thanks to rebuilding.

Only during the quarter the hurricane hit did the state's overall economic picture take a hit, and it was nominal.

The Carolinas saw a similar uptick after being hit by Hurricane Hugo.

But to such historic perspective, some economists add a huge caveat: Florida's recent experience is unprecedented in modern history.

And no one knows how endless national coverage of hurricanes will affect the state's long-term attractiveness for businesses, retirees or workers seeking new homes.

What's more, some of the very post-Andrew implemented devices that are credited with shoring up the state's insurance industry during this hurricane season _ such as higher deductibles for homeowners _ might make it harder for individual families to rebound.

Richard A. Brown, chief economist for the Federal Deposit Insurance Corp. in Washington, was bullish on Florida's economy after Hurricane Charley. He was far more circumspect after Hurricane Jeanne crossed the state Sunday.

After all, Pensacola, the western Panhandle's economic hub, has been virtually isolated with the collapse of the Interstate 10 bridge crossing Escambia Bay. That is expected to continue for at least 12 more days as crews scurry to repair just one span by an Oct. 11 deadline.

And several barrier islands across the state remain uninhabitable.

Statewide, commercial airports and theme parks have suffered sporadic closings. And local tourism officials, hoping to book groups for Florida's massive convention centers, have trouble downplaying Florida's six-month hurricane season.

"It certainly will accelerate investment in rebuilding," Brown said this week.

"But there are some negatives accumulating as the number of storms increase. I think it's very difficult to say that somehow this is a long-run, net positive for the state."

Ed Montanaro, a former economist for the Florida Legislature, said he's hesitant to apply the lessons from Hurricane Andrew to hurricanes Charley, Frances, Ivan and Jeanne.

"I think this experience may be quite different given the extent of the damage. And we should probably guard against the notion that is a typical economist perspective that in the aggregate all things work out," he said. "There are winners and losers. Someone who loses their job can't automatically be turned into a roofer."

Fishkind warned Florida's biggest challenge could come next year, if another active hurricane season appears to bear out some meteorologists' predictions that the state is at the start of a more active hurricane cycle.

"If that happens, insurance costs will rise, governments will have to budget for more cleanup each year and that means employment in Florida will get more expensive," Fishkind warned.

"You'll also have to deal with promotion efforts so tourism customers don't get the idea that Florida is a destroyed place to visit."

Hoping to repeat a strategy that appeared successful after the 2001 terrorist attacks, the state's tourism agency, Visit Florida, has said it will seek as much as $30-million from the state Legislature to launch an aggressive, multimedia campaign to woo back tourists.

Federal relief money also is flowing to the agriculture industry.

And state officials say they plan to highlight how this year's hurricane season is a once-a-century phenomenon, not seen since 1886 in Texas.

"We'll need to show Florida is a safe long-term investment for corporations," said Pam Dana, Bush's tourism, trade and economic development director. "We'll have to show that the state's entire structure for tourism hasn't gone to pot."

At least one business has decided to stay, Bush proudly announced Tuesday. CitiFinancial, a member of Citigroup, pledged to rebuild its 50,000-square-foot Pensacola customer service center that had been damaged by Hurricane Ivan. The company employs about 400 in the far-west Panhandle city.

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