Back on Track

The study is titled “Florida Back on Track.” But are we? As the calendar turned to July, Gov. Rick Scott, indeed, proclaimed so, calling the late June report issued by Moody’s Investors Service “more proof that our economic policies of the last two years have put Florida’s economy back on track.”

In addition, Scott cites that “in a little over two years since I’ve taken office, we’ve created more than 330,000 private sector jobs—and we are now closing in on the halfway point to our goal of creating 700,000 jobs in seven years.”

“We’ve made the tough choices necessary to balance the budget, and now we are enjoying the first budget surplus in years,” he continues.

The report forecasts that Florida’s 2013 employment growth is expected to increase 1.9 percent, surpassing the national rate of 1.3 percent and remain higher than the nation over the forecast period through 2017.

According to the report, Florida (rated Aa1 with a stable outlook) was one of hardest hit states in the recent recession, with unemployment spiking to 11.4 percent and a housing market bubble that burst into one of the worst real estate market declines in the country, leading to significant revenue fall-off and budget strain. Now, by contrast, revenue trends, year-end surpluses and other economic indicators now show the state’s recovery is well under way.

Four key financial highlights:

  1. Current financial and economic strengths underscore Florida’s resilience and sound fiscal management;
  2. Reserves are being rebuilt to provide cushion against future downturns;
  3. Revenues are growing and the economy is improving, although recovery in the housing sector is still very slow;
  4. Florida remains exposed to revenue volatility, as well as hurricane risk through the debt structure created to help insure property losses from future storms.

Moody’s credits the strong population growth and solid economic fundamentals to predictions of long-term economic growth: “Over the long term, Florida’s pace of growth is expected to outpace the nation due to the state’s favorable climate and low cost of living, as well as strong demographic and economic fundamentals.”