DeFlorida Blueprint: DeSantis’s economic record as governor
DeFlorida Blueprint is a five-part series examining the legislative and policy record of Florida Gov. Ron DeSantis. As the Florida legislature wraps up its 2023 session, DeSantis is widely expected to declare he is running for the Republican presidential nomination, putting him on a collision course with former President Donald Trump. The first part of this series examined his record on education and the second part did the same for healthcare. The third installment, below, looks at DeSantis’s record on economic policy.
Gov. Ron DeSantis (R-FL), a presumed 2024 contender, will be able to boast about Florida’s economic success during his tenure.
Since taking office in 2019, DeSantis gained national prominence in part for his handling of the pandemic, the state’s lure as a migration hot-spot, and rapid economic growth.
Jobs and business
Florida’s climate, relatively low cost of housing, and favorable tax environment have caused many families and companies — many from high-cost states like New York and California — to relocate to Florida.
Population Census Bureau data released last year showed that Florida is growing quicker than any other state, with its population growing nearly 2% from 2021 to 2022 alone. That number grows to 3.3% from April 2020 to July of last year — representing more than 700,000 new residents.
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DeSantis bragged about Florida’s successes in his State of the State address after his reelection, a possible preview of a presidential campaign message.
“We rank No. 1 in the nation for new business formations. We are No. 1 in economic growth among large states. Florida has more people employed today than before the pandemic. Our unemployment rate is one of the lowest on record, and it is significantly lower than the national average,” DeSantis said. “And we do that with having the lowest per capita state tax and lowest per capita state debt burdens amongst all large states.”
Businesses have relocated to the Sunshine State at a notable pace since the start of the pandemic.
Billionaire hedge fund boss Ken Griffin, citing a better corporate environment, announced last year that he was moving his massive firm Citadel from Chicago to Florida. Popular fitness company Barry’s relocated its main office from California to Florida. SH Hotels & Resorts, which manages luxury hotels, also shifted its corporate headquarters from the Golden State to Miami.
In addition, business creation is booming in Florida. Out of the 5.8 million new business applications filed across the country from January 2021 to January 2022, a whopping 12% were in Florida.
Florida’s unemployment rate is also an ultra-low 2.6%, well below the national average of 3.4%.
Housing
While the national housing market is flailing, because of the business growth and wave of new residents, many housing markets in Florida are holding up better than the rest of the country.
In San Jose, California, for instance, housing prices have fallen 8.8% over the past year, according to Redfin. Prices have plunged 4% in New York City and 4.6% in Los Angeles. But in Miami, prices have risen 7.6%, in Fort Myers, located on the west coast, prices have grown 14%, and in nearby Naples prices are up more than 13% in the past year alone.
Economic output
Output growth, as measured by gross domestic product, has been red-hot.
Over the course of DeSantis’s entire time as governor, which began in January 2019, to the fourth quarter of last year, real GDP for Florida has ballooned by 13.2%, according to data from the Bureau of Economic Analysis. That dwarfs the GDP growth of other big states. For instance, New York grew 5.6% during that same period, Massachusetts expanded by 7.4%, and New Jersey only increased by 5.4%.
Taxes
DeSantis has maintained Florida’s low-tax status during his tenure as governor. The state is one of a few in the U.S. without a state income tax, a source of appeal for prospective residents and business owners.
The Tax Foundation, which generally favors low taxes, ranked Florida No. 4 in its 2023 State Business Tax Climate Index. New York, New Jersey, and California clocked in at the last few spots.
In February, DeSantis announced a plan to offer the largest tax relief program in Florida’s history. The plan would save taxpayers in the state some $2 billion during fiscal 2024, according to the governor’s office.
The governor also approved a yearlong program that provides taxpayers with toll payment relief. The plan automatically gives customers with at least 35 monthly toll transactions a 50% credit to their account. Savings totaled nearly $37 million in January alone.
Pandemic
A major feather in DeSantis’s hat is how he managed to keep businesses up and running during most of the pandemic while other states imposed long-lasting restrictions that caused many companies to falter or even close up shop. In September 2020, DeSantis signed an executive order that opened all Florida businesses regardless of local restrictions. That allowed places such as restaurants and gyms to operate at full capacity.
In May 2021, DeSantis issued an order that suspended all remaining local coronavirus restrictions and mandates for both businesses and individuals.
Infrastructure
Despite keeping taxes low, DeSantis has invested in building up the infrastructure of the state. He signed a fiscal 2023 budget that included $4.4 billion for highway construction, $136 million in seaport infrastructure enhancements, and $867 million for rail and transit program growth.
“The historic investments made during the 2022 Legislative Session are a catalyst in bolstering communities, supporting Florida’s thriving economy, and building upon Florida’s innovative transportation infrastructure for generations to come,” said Florida Department of Transportation Secretary Jared Perdue.
Disney
On cultural issues, DeSantis has found himself at odds with corporations. Most notably, DeSantis and Disney have locked horns in a battle that has since spread into the federal courts.
The feud began after Florida lawmakers passed HB 1557, known as the Parental Rights in Education bill, which was dubbed the “Don’t Say Gay” law by opponents. Amid pressure from activists, Disney CEO Bob Chapek publicly denounced the legislation, and the company said its goal was to get the law repealed or struck down in the courts.
“This state is governed by the interests of the people of the state of Florida. It is not based on the demands of California corporate executives,” DeSantis hit back. “They do not run this state. They do not control this state.”
The governor then announced he would be pushing to strip Disney of its special taxing district, which includes the Walt Disney World Resort properties. But the Disney-backed board of the Reedy Creek Improvement District and Disney then crafted an agreement designed to undermine Florida legislation seeking to restructure the business district.
After much more maneuvering back and forth between Florida and Disney, the latter filed a lawsuit against DeSantis and members of the board in the U.S. District Court for the Northern District of Florida, alleging a “relentless campaign to weaponize government power against Disney in retaliation for expressing a political viewpoint unpopular with certain state officials.”
The back-and-forth has drawn praise by some, who contend the state was working to curb an unwelcome growth in corporate forays into politics, which has become increasingly more common, but critics have argued that the state is overstepping its bounds.
Government interference in corporate affairs has long been something that companies have worried about from the Left. But as corporations have increasingly weighed in on hot-button political matters such as abortion and transgender issues, they have met stepped-up opposition from Republicans like DeSantis.
Still, some who believe that government should stay out of corporate boardrooms have praised the move because they see it as a deterrent for companies like Disney to wade further into the political realm.
ESG
Related tangentially to the Disney dust-up is DeSantis’s crusade against the corporate environmental, social, and governance movement known as ESG. Pushback to ESG has become increasingly common as many GOP officials see it as incompatible with one of the most basic tenets of capitalism, namely, that businesses should focus on creating value for shareholders.
DeSantis announced anti-ESG legislation in February that builds off previous actions he has taken and would prohibit the use of ESG in all investment decisions at the state and local level, ban state and local entities from any consideration of ESG in the contracting process, and block state and local governments from weighing ESG when issuing municipal bonds.
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And last year, Florida’s CFO Jimmy Patronis announced that the state would divest some $2 billion from BlackRock, the largest such state divestment from the money manager over its ESG stance.
While proponents of ESG see it as a way that finance and business can cause social change (for example, by mitigating climate change), Republicans see the drive as an attempt to distort the free market and even the culture of the United States through capital and influence.
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