The Millstone Times July 2021

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The Garden State vs The Sunshine State.. When Will The Retirement Migration End?

Education - Florida allocates 28% of their budget to education, spending $7,408 per pupil, below the national average of $11,762, and well below NJ at $18,235. Teachers in Florida average a $47,267 salary (54% higher than the state’s median income) versus NJ’s teachers at $76,430 (46% over their median in- come). Nevertheless, Florida is ranked 7th overall in education and 1st in higher education by US News, and NJ at 2nd and 28th, respectively. Law Enforcement- A cop in Florida can expect a $49,085 average salary and $87,490 in NJ. NJ ranks 4th in public safety whereas Florida is 35th. Government Workers Pension and Post-Re- tirement Benefits - Florida has $20.2 billion of unfunded liabilities in this category, which pales in comparison to NJ’s over $150 billion deficit (4x the state budget). In 2001 NJ’s public unions success- fully lobbied legislature for a 9% pension increase, a reduction of employee pension contributions from a suggested 5.5% down to 3.5% of salary, and ability to retire 5 years earlier at full pension. Florida also does not have a prevailing wage law like NJ does. Consideration of these statistics and many more has led Truth in Accounting to rank Florida with a “C” for fiscal responsibility with $11.6 billion of debt versus New Jersey graded an “F” provoked by $195.5 billion of debt.

In conclusion, maybe Florida is right for some while New Jersey for others. Some economists posit that Florida hinders the poor by leaning on their regressive sales tax (poorest 20% pay 12.9% of their total income to state and local taxes while the top 1% pay only 1.9% of their income) and bolsters the rich by being one of only seven states without a progressive income tax, as well as not having estate or inheritance taxes. It doesn’t take an economist to realize retiring on a lofty NJ state pension to a tax climate like Florida makes sense, especially if primary education is not a major concern. Unless there is an upheaval of the system, I project more government workers will strive to make their fortune in the Garden State, send their kids away for college, and eventually reap their rewards in the Sunshine State. A word of caution, the cost of providing healthcare to one person over age 65 is 3-5x higher than someone under age 65. Considering this is Florida’s fastest growing segment, does their plan of senior citizen absorption have staying power?

44 The Millstone Times

July 2021

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