I attended the Heart of Florida United Way Legislative Preview and the Orlando Business Journal Economic Outlook on January 17th (yes, it was a busy day). I thought you’d like to hear about what was discussed. Here are the highlights!
Heart of Florida United Way Legislative Preview
- 40% of Americans don’t have $400 in the bank
- With ALICE working two to three jobs to make ends meet, when would they have time to advocate for themselves?
- Because of this, there was a lot of talk about how the supermajority may or may not make it easier to help ALICE.
- One panelist hopes there will be some regulations of the new fintech applications for mortgage approval that are not predatory to ALICE.
- We have a supermajority in both the house and the senate
- The governor will probably get no pushback on his budget
- There is a $5.5 billion budget surplus
- “They’re swimming like Scrooge McDuck in Tally,” said the moderator
- Home Rule will get more strict.
- There’s a coffer of funds to help with housing, but it’s only $200 million, which equates to 4,000 units statewide.
- There are 100,000 people in Orange County alone that need assistance.
- Current legislation preemption allows for areas to become AirBNBs, which removes them from the long-term rental pool for workers who need to rent (this is happening a lot in beach towns; where can the restaurant workers live?)
- $125 million was spent on this last year
- It will probably have more money attached to it, and reforms will be put in place
“The Year of Special Sessions”
- More will happen because it acts as a media exposure bump.
- And with this governor, that media bump will be nationwide.
- The Republicans will be able to do whatever they want; anticipated topics.
- Resign to Run Law (governor currently has to resign to run for President)
- Seminole Compact/Sports betting
- Disney/Reedy Creek
- Higher Education Funding and something called Pre-eminence, where the legacy universities get extra funding; if they decide to shake it up on how it’s allowed.
- Open carry laws
- Social issues
- China Real Estate (the Chinese government seems to be buying a lot of properties and homes across the street from military bases these days)
- How will the state help with the teacher and bus driver shortage?
- There are currently 300 open teacher positions in Orange County.
- While entry-level pay is decent, there isn’t enough money to pay seasoned teachers, so they leave.
- Orange County is fighting for the same bus driver pool as all the municipalities and theme parks, so it’s competitive and limited in availability.
- The state provides per-student funding if they ride a bus; this only covers 50% of the expense.
- Doesn’t seem to be a priority this legislative session
- The public health emergency label is expiring this year, so 5.5 million Floridians must be redetermined for Medicaid.
- Groups are working on plans to help make this go smoothly. Thank goodness
- The new 988 hotlines in Central Florida have seen a 300% increase with no promotion.
- They expect an 800% increase once it’s promoted nationwide.
- The three counties HFUW covers are seeing 32 calls per day.
- The First Lady has selected mental health as her top priority.
Orlando Business Journal Economic Update
The Fed is on a tightening cycle that should lead to a recession. This is the fastest rate increase in history. It’s not high, but the pace of the rise is insanely high.
Some factors say the recession won’t be soon, though:
- Payroll erosion typically occurs in a recession, but we’re not seeing it. Also, we’re currently in a labor shortage with 10.5 million job openings and 6 million job seekers. This gives us time before a recession.
- There’s still tremendous momentum that will give us time before the Fed steps on the brakes of inflation.
- The Supply Drain has been stabilized since January 2022.
- Ukraine/Russian War commodity prices had receded to where it was before the war started.
- Inventory levels are well above trend.
- Retailers had cut supply on purpose during the pandemic because that was in their playbook for when national emergencies happen. But because of the stimulus, consumer demand was still there. And now, there will be sales all of the time until supplies level off.
Housing is less of an okay story, but inflation measures don’t include housing metrics in the calculation!
- It’s not based on home price.
- It’s a survey of what homeowners think they can rent their house for (the economist feels that we’re double counting rent because of that).
Goods cost inflation may be coming down, but service costs are sticky.
- Wage inflation is 5% with labor shortages – it’s not going down
- Productivity isn’t growing, which could lead to inflation
Labor force participation rates are down, which isn’t good.
- People dropped out during the pandemic and never came back.
- The population replacement rate should be 2.1 to sustain our population, but it’s currently at 1.64.
- Many baby boomers retired early in the pandemic (the company I worked for at the time had more than 200 people take the Voluntary Early Retirement Something-or-other Plan – it was called the VERSP, is what I remember).
Tips for employers to find good employees
- Really determine what kind of degrees and certifications your job requires; can people with experience do it without needing a degree? Don’t limit who you might find!
- Offer flexibility for working parents.
- Create pathways for older workers to stay on or rejoin
- Establish non-traditional talent pipelines
- Avoid everyone burning out!
In Florida, with significant local growth happening, we may not see a recession similar to the country.
- It’s all about the population growth – more than 650,000 people have moved here since the pandemic (800 per day)
- We’re the third-largest state growing at the third-largest rate
- The people moving here are some of the highest earners, making $200,000 plus
- More than half of the migration is in the I-4 corridor
- But insurance rates will put pressure on this market
- Seeing over 100% increases in premiums (and if you haven’t seen it yet, it’s coming)
People’s savings rate is at an all-time low.
- Despite people making more money, they can afford less.
- Credit card usage is at an all-time high.
- The recession will come by the middle of next year at the latest, late this year at the soonest
- It could feel like a soft landing in Florida
- Hoard your cash, spend less, save more
Namaste and Keep Learning,