Transcript Florida Demographic In-Depth Analysis Taxation & Budget Reform Commission September 6, 2007 Presented by: The Florida Legislature Office of Economic and Demographic Research 850.487.1402 http://edr.state.fl.us.

Florida Demographic
In-Depth Analysis
Taxation & Budget Reform
Commission
September 6, 2007
Presented by:
The Florida Legislature
Office of Economic and
Demographic Research
850.487.1402
http://edr.state.fl.us
Economy

Population growth continues to be the
state’s primary engine of economic
growth, fueling both employment and
income growth.

This means that “demographics” is key to
understanding Florida’s future economic
health.
September 6, 2007
Page 1
Population

Population growth has hovered between 2.0% and
2.6%, since the mid 1990’s. Over the forecast
horizon, population growth will slow – averaging just
1.1% between 2025 and 2030.

Florida is still on track to break the 20 million mark
and become the third most populous state –
surpassing New York – shortly after 2010.

In the next decade, almost one-half (46%) of U.S.
population growth in the next decade will come from
three states: California, Texas and Florida.
September 6, 2007
Page 2
Florida’s April 1 Population
29,800,000
2030
26,513,331
24,800,000
19,800,000
2000
15,982,824
2006
18,349,132
14,800,000
9,800,000
4,800,000
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
Florida’s population:



was 15,982,824 in 2000
was 18,349,132 in 2006
is forecast to grow to 26,513,331 by 2030
September 6, 2007
Page 3
Florida’s Population Growth
450,000
350,000
250,000
Net Migration
Natural Increase
150,000
50,000
-50,000
19691970
19741975
19791980
19841985
19891990
19941995
19992000
20042005
20092010
20142015
20192020
20242025
20292030

Most of Florida’s population growth is from net
migration, representing about 87 percent of Florida’s
population growth between 2005 and 2006

By the mid-2020s, all of Florida’s growth is forecast
September 6, 2007
to be from net migration
Page 4
Net Migration by County
(April 1, 2000 to April 1, 2006)

Statewide, net
migration accounted
for 88.7% of the
population growth
between April 1,
2000 and April 1,
2006.

There were 22
counties in the state,
where all the growth
between April 1,
2000 and April 1,
2006 has been due
to net migration.
September 6, 2007
Page 5
Population by Age Group
4,500,000
4,000,000
April 1, 2006
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
0-17
18-29
30-39
40-49
50-59
60-69
70-79
80+
age group
As of April 1, 2006, it was estimated that there were:








4.1 million Floridians under the age of 18
2.7 million Floridians between 18 and 29
2.7 million Floridians in their 40s
2.4 million Floridians in their 50s
2.3 million Floridians in their 30s
1.7 million Floridians in their 60s
1.4 million Floridians in their 70s
just under 1 million Floridians 80 or older
September 6, 2007
Page 6
Percent of Population Growth by
Age Group
25.0%
20.0%
April 1, 2006 to April 1, 2030
15.0%
10.0%
5.0%
0.0%
0-17
18-29
30-39
40-49
50-59
60-69
70-79
80+
age group

Between 2006 and 2030, Florida’s population is forecast to grow
by over 8 million

Florida’s older population (age 60 and older) will account for most
of Florida’s population growth, representing 55.3 percent of the
gains

Florida’s younger population (age 0-17) will account for 14 percent
of the gains
September 6, 2007
Page 7
Percent of Total Population by
Age Group
85+
85+
2000
80 - 84
2006
75 - 79
75 - 79
70 - 74
70 - 74
65 - 69
65 - 69
60 - 64
60 - 64
55 - 59
55 - 59
50 - 54
50 - 54
45 - 49
45 - 49
40 - 44
40 - 44
35 - 39
35 - 39
30 - 34
30 - 34
25 - 29
25 - 29
20 - 24
20 - 24
15 - 19
15 - 19
10 - 14
10 - 14
5- 9
5- 9
0- 4
0- 4
8
7
6
5
4
3
2
1
0
percent
1
2
3
4
5
6
2006
80 - 84
7
8
8
7
6
2030
5
4
3
2
1
0
1
percent
2
3
4

In 2000, Florida’s prime working age population (ages 25-54)
accounted for 41.5 percent of total population. With the aging baby
boom generation, this percentage is estimated to have fallen to 40.2
percent in 2006 and by 2030 is projected to represent 34.1 percent

Population aged 65 and over is forecast to represent 26.1 percent in
2030, compared to 17.6 percent in 2000 and 16.9 percent in 2006
5
6
7
8
September 6, 2007
Page 8
Baby Boom Cohort



Birth Cycle: 1946 – 1964
Entry into the Workforce: 1967 – 1985
Entry into Retirement: 2011 – 2029
2050
September 6, 2007
Page 9
Global Trends

By 2025, the world will be:




Much Older (the US will largely look like FL today)
Far Less Caucasian
Far More Concentrated in Urban Areas
The aging population is a function of:



The Baby Boom Cohort
Falling Fertility Rates
Rising Longevity (life expectancy)
September 6, 2007
Page 10
National Workforce Trends

The ratio of taxpaying workers to retirees will
fall:




Today, 4:1
50 Years from Now: 3:1 (Florida 2:1)
Pool of native workers will shrink: new
retirees will not be fully replaced by younger
workers
Worker shortages (especially among highly
educated and skilled) will become the norm
September 6, 2007
Page 11
More Ramifications



Labor force contraction could depress economic
output and boost inflation (GNP...1.5% growth in the
future compared to 4.5% in recent times)
Long-term economic slowdown and larger
retirement population will further lead to a decline in
consumer spending and changes in investment
patterns as the senior population spends down its
savings
Lower standard of living, especially for those seniors
living on fixed incomes for 20 or more years.
September 6, 2007
Page 12
Florida Challenges


Aging State – more intense in Florida than
elsewhere because population share
(26.1% in 2030)
Growing State – all of the same problems
as we’ve had in the past, only more so



Greater Need for Services
Allocation of Increasingly Scarce Natural Resources
(especially water)
Provision of Needed Infrastructure (new and
replaced)
September 6, 2007
Page 13
Strategies

Attracting migration from countries which
have greater youth populations will become
an important relief valve for worker shortages


On average, immigrants are younger than native
Americans, are more inclined to work and have more
children per family (Federal Reserve)
Incentive programs to keep workers in the
workforce longer will also be important
September 6, 2007
Page 14
Implications for Services



Overall, the state will face the need for more
costly services with less revenue.
Labor-intensive jobs (firefighters, police,
construction) will be harder to fill.
Today’s elderly prefer face-to-face interaction.
In the future, people will become more
technologically savvy and more comfortable
working over the internet.


Less reliance on physical space
Fewer employees as the use of technology increases
September 6, 2007
Page 15
Health Care

Today, elderly and disabled Medicaid recipients
account for an estimated 23% of the total caseload
– but almost 70% of Medicaid spending.




Use of acute and long-term care services is high.
The majority of nursing home residents rely on Medicaid
support after the cost of their care exhausts their savings
and they qualify for assistance.
An increasing array of new services, procedures and drugs
prolong life – but also the potential for chronic problems.
The number of available family caregivers will diminish in
relation to the number who need care.
September 6, 2007
Page 16
Criminal Justice



Propensity to commit crime diminishes over
time; however, Florida has been increasing
the classification of crime.
Prisons will have an increasing share of older
and infirm inmates.
Likelihood of increased crimes and acts of
fraud against the elderly will stress the
system.
September 6, 2007
Page 17
Education: School-Age Population and
Public School Enrollment
Percent Change
7.0%
6.0%
Population Age 5 to 17
5.0%
Public School Enrollment
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
1960
1970
1980
1990
2000
2010
2020
2030

Florida’s school-age population (ages 5-17) currently represents about 16.5% of the total
population. This age group is forecast to represent 14.7% of total population by 2030.

School-age population has been slowing in growth, but is not expected to decline over the
forecast horizon.

Growth in public school enrollment has slowed from a recent peak of 2.8% in 2001 to a decline of
0.4% in 2006.
September 6, 2007
Page 18
Florida’s Hispanic Population
30.0%
25.0%
20.0%
19.1%
19.6%
2005
2006
20.9%
22.3%
23.5%
24.4%
25.1%
2025
2030
16.8%
15.0%
10.0%
5.0%
0.0%
2000
2010
2015
2020

Currently Hispanics represent about 19.6 percent of
Florida’s population

Florida will become increasingly more Hispanic; as
Hispanics are forecast to represent just over 25
percent of Florida’s population in 2030
September 6, 2007
Page 19
Language and Foreign Born
Language Spoken at Home
Total
Speak only English
Speak another Language
Speak English “very well”
Speak English “well”
Speak English “not well”
Speak English “not at all”
Floridians in households
(age 5 or older)
2005
16,270,161
12,141,842
4,128,319
2,271,250
820,066
664,748
372,255

In 2005, over 4.1 million Floridians (age 5 or older) did not speak only English
at home; 1 million of which spoke English “not well” or “not at all”. If this
relationship continues, by 2030, over 6.4 million Floridians (age 5 or older) will
speak another language possibly in addition to English at home, of which
almost 1.6 million will speak English “not well” or “not at all”.

In 2005, 18.7% of Florida’s household population was foreign born.
September 6, 2007
Page 20
Revenues vs. Expenditures
Comparison of Growth Rates: Collections and
Expenditures
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
82- 83- 84- 85- 86- 87- 88- 89- 90- 91- 92- 93- 94- 95- 96- 97- 98- 99- 00- 01- 02- 03- 04- 05- 0683 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07
-10.0%
GR Appropriations
GR Collection Growth
7.6% over 25 years
6.6% over 20 years
6.1% over 15 years
5.4% over 10 years
6.6% over 5 years
GR Collections & Transfers
GR Expenditure Growth
7.4% over 25 years
6.9% over 20 years
6.7% over 15 years
6.6% over 10 years
8.8% over 5 years
September 6, 2007
Page 21
Revenues



One implication of the declining working-age
population is that government tax structures which
rely heavily on this age-group will have to be
reevaluated.
An increasingly smaller percentage of individuals will
assume the bulk of the tax burden as the number of
elderly increases and the demand for services
continues to grow.
The states that will be hardest hit are those that rely
on personal income and payroll taxes as their
largest revenue sources.
September 6, 2007
Page 22
Sales Tax



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Studies have found that the elderly tend to spend
less than younger persons on goods and more on
services.
The state’s current sales tax structure with its
dependence on the sale of goods will come under
pressure from this fact.
If this risk is not addressed, then the state will likely
see much lower growth rates for sales tax receipts
than it has normally seen in the past.
Services make up 60% of personal expenditures.
September 6, 2007
Page 23
Property Taxes



Traditionally, senior citizens have opposed property taxation to a
greater extent than the rest of the population.
Not only do many live on fixed incomes, but they also have no
school-age children. As their connection to providing this type of
funding diminishes, they are more apt to oppose property tax
increases of any kind.
Conversely, Florida offers several income-based exemptions and
tax advantages for senior citizens that will become increasingly
expensive as the baby boomers hit their retirement years. While
today’s elderly have the lowest poverty rates of any age group,
this will not be true in the future. An estimated one-third of
boomers are projected to have limited financial assets or private
pensions when they retire.
September 6, 2007
Page 24