Florida is now the third most populous state in the nation with more than 20 million residents, according to the U.S. Census Bureau’s December 2015 state population estimates. It has a diverse population that is expected to exceed 23 million within four years. The state is divided into four distinct districts, which makes it difficult for one-size-fits-all business strategies; this is exacerbated when each district is governed differently.
South Florida’s Hispanic culture is totally different from Florida’s Panhandle area, which has a more conservative culture. Central Florida, with its tourist destinations and large retirement housing tracks, appeals to more middle-class residents. The Jacksonville to Tallahassee portion of Florida brands itself as the state’s business and government hub, but it is often intermingled with southern Georgia.
These subcultures are creating business chaos. Conservatives, liberals, business interests, and cultural groups are competing to control the direction of the state. There is a huge no-growth movement in many areas that would like to dramatically slow population growth through code regulation, environment fiat, and impact fees. There are few efforts to fast-track projects, and many local jurisdictions ignore the statewide construction codes by developing their own interpretations. It can take up to six months to start a simple construction project because of increasing government bureaucracy.
In my county of Lake, impact fees to build a 2,000 square-foot home are $12,933. That does not include building permit fees, water hookups, or local city impact fees, which can add up to almost $25,000. Lake County’s new comprehensive land plan is very restrictive and daunting to navigate for developers. There is an element that would like to see housing growth stopped, and we are always one election away from those groups seizing control.
Other state policies have made it even more difficult to do business. This year, the Florida Supreme Court gutted the 2004 Workers Compensation Reform Legislation, which limited attorney’s fees and restricted the time workers could stay on compensation benefits. Starting Oct. 1, businesses face a whopping 19.6% increase in workers compensation rates, which will devastate the construction industry.
Florida also faces what the Department of Education calls a “critical teacher shortage.” The state says 26,500 courses are being taught by non-certified teachers and estimates there are more than 6,000 teacher vacancies. Decisions to eliminate teacher pensions and tenure while imposing punitive standards are coming home to roost, as many educators have decided jobs in the private sector are more lucrative. Many school districts are badly underperforming, making a skilled-labor shortage even worse.
Florida has no personal income tax, but local authorities are imposing higher property tax millage rates and increased sales taxes and fees, which likely are even more punitive. Plus, homeowners and commercial insurance is on a banana peel propped up by a quasi-government-backed Citizens Insurance system, which many believe will bankrupt if the state is hit by a major hurricane. Throw in the threat of terrorism in the tourist areas and the Zika virus—Florida has some serious business challenges.
Unless government takes control, manages its diversity, and taps down the no-growth movement, then clouds will continue to dim the business environment. Despite all, Florida is still a great state; it’s the Sunshine State.