Harper: Florida’s Economic Future Looks Bright As Job Market Shifts

Jan 5, 2017

 


In this week’s Economic Report, Dr. Rick Harper looks at Florida’s 2017 economic outlook.

A recent University of Florida consumer survey found that a majority of people in the state are feeling very positive about their economic future.

“The overall index was up almost seven points to a value of 97. That’s a pretty strong increase,” Harper said. “The components that make up the index uniformly increased – from people’s perception of their possibility of financial health in the future and their perception of today’s financial health.”

The job market in the state also continues to be strong, Harper said.

“The expansion continues to have legs, and that’s particularly so in Florida,” Harper said. “As we look back at the Christmas season, we’re seeing disappointing results from places like Macy’s and Kohl’s. Sears is selling its Craftsman unit to raise some cash.”

Harper said that traditional department stores are having a difficult time competing with online retailers, and more people are also looking for experiences rather than products. These experiences are something Florida is rich in.

Credit Michael Spooneybarger/ CREO

“We offer retirement services that people travel thousands of miles and leave their home in the frozen north lands to enjoy,” Harper said. “Jobs are growing in the areas of the Florida economy that service retirees and the same things is true for tourism.”

Sectors like air travel, hotels and restaurants are booming in the state as a result.

“Those things are all good for Florida,” Harper said. “The challenge, as always, is as we shift away from traditional jobs in Northwest Florida, such as the military and federal civilian jobs that support military and manufacturing, particularly in Pensacola.”

South Florida is seeing its peak tourism season now, and Harper said that it’s not only hotels and restaurants that benefit from the influx of travelers.

“A trend in retail is that people do more shopping on vacation when they’re together with their spouses,” Harper said.

Harper said that there is some uncertainty in how the legislature might change the state’s tourism efforts in the coming year, however.

“It appears that House Speaker (Richard) Corcoran may have Visit Florida, the state’s tourism agency, in his sights for spending reduction,” Harper said. “I personally think we need to do tourism spending. Bed tax dollars are important because no one hotel, even a theme park-sized operation, could advertise Florida to the extent it needs to be advertised. Any time Hilton or Holiday Inn is advertising their property in a particular market, we would do better advertising the destination overall.”

Tourist development taxes, or as they are more commonly known “bed taxes,” are also at the center of a proposal by Airbnb to partner with Florida counties to collect and remit taxes on behalf of the counties.

“Santa Rosa is already participating and Escambia is looking for an agreement. Airbnb participates with roughly half the counties in Florida right now,” Harper said. “It’s pretty clear where we are going to end up. Florida has very strict transparency laws, and the Department of Revenue is entitled to know absolutely which properties are collecting bed tax and remitting even if they use a third party such as Airbnb to do it.”

Harper said it’s important that the department know who is collecting the taxes because if Airbnb were not to collect and remit taxes that sets up a differential with a subset of properties paying the entire burden of doing the area’s destination marketing, no matter where they stay.

“Everyone has to participate in order to keep the overall rate down and provide the amenities,” Harper said. “In Pensacola, that’s the Civic Center operating loss and debt service. Those are expenditures that the county commission is allowed to do under state statute for appropriate uses of bed tax.”

The current negotiation will allow the state to collect the taxes with appropriate privacy measures in place.

“The state will not divulge information about who pays how much tax unless it’s allowable under state statute,” Harper said. “We’ll get there. We’re just in the negotiation phase now.”

Dr. Rick Harper is an economist at the University of West Florida. He can be reached at rharper@uwf.com. CREO staff writer Mike Ensley contributed to this report. He can be reached at kensley@uwf.edu.

This article is part of a collaboration between WUWF and the UWF Center for Research and Economic Opportunity.