Economic Analysis

Florida’s GSP Beats the U.S. Average, but Focus Remains on Low-Skill Industries

Florida’s GSP Beats the U.S. Average, but Focus Remains on Low-Skill Industries

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Will Florida Become the New Mississippi?

In 1997, gross state product (GSP) per non-farm payroll employee in Mississippi was 30% lower than in Florida. Few analysts back then, if asked, would have projected Mississippi to match Florida fifteen years later. In 2012, however, by that measure of labor productivity the magnolia state was one percent ahead of the sunshine state. More realistically, given how hard it is to measure value added, the two states were essentially the same. Over the 15 years, output per worker rose 76% in Mississippi, more than three times Florida’s 22%.
 

The Florida Retirement System: A Poster Child for State Government Budgeting

Most state and local governments offer their employees defined benefit (DB) retirement plans, which guarantee steady income for the remainder of the beneficiary’s life. This is in contrast to many private sector jobs where DB pensions are scarce, as most have transitioned to employee-managed defined contribution (DC) plans, in which the employee is responsible for managing their retirement assets personally (e.g., 401(K)).

Florida Sales Tax Policy and Internet Sales

Earlier this month, as American consumers were filling their online carts during the nation’s peak shopping season, the U.S. Supreme Court again declined to rule on disputations between states and online retailers regarding the collection of state sales taxes.

Any proposed policy change regarding sales taxes is crucial to the state budget, because Florida remains one of the few states without a state income tax. Sales and use taxes are the single largest component of Florida tax collections.

1. Mankiw, N, Weinzierl, M, and Yagan, D. 2009. Optimal taxation in theory and practice. Journal of Economic Perspectives.
2. Holt L, and Lotfinia, B. Increasing Florida’s Sales Tax Revenue from Internet Purchases. Florida Focus, March 2009. Bureau of Economic and Business Research, University of Florida, Gainesville, FL.
http://www.bebr.ufl.edu/files/FloridaFocus5_1_2009.pdf
3. Press release http://news.ufl.edu/2013/04/18/legislative-issues/
4. Mathis, K.B., Amazon.com proposes 3,000 jobs, $3000M Florida Investment, Jacksonville Financial News & Daily Record, June 14, 2013.

House Value and Consumer Spending in Florida

Over the quarter-century from the third quarter of 1975 to the third quarter of 2000, the average value of a house in Florida rose, in constant 2005 dollars, from $110,000 to $169,000, a 54% gain. Then in the next six years, from 2000Q3 to 2006Q3, according to data maintained by the Lincoln Land Institute, the average doubled to $341,000. Five years later, most of that gain had evaporated (see graph below), with the average value falling to $176,000. Finally that plunge has stopped.

Charles W. Calomiris, Stanley D. Longhofer, and William Miles, “The Housing Wealth Effect: The Crucial Roles of Demographics, Wealth Distribution and Wealth Shares,” National Bureau of Economic Research, Working Paper 17740, January 2012.

The Lincoln Land Institute requests that users of its price data cite Davis, Morris A. and Jonathan Heathcote, 2007, “The Price and Quantity of Residential Land in the United States,” Journal of Monetary Economics, vol. 54(8), pp. 2595-2620, data located at Land and Property Values in the U.S., Lincoln Institute of Land Policy http://www.lincolninst.edu/resources/

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