Florida's Fiscal Policy: Responsible Budgeting in a Growing State

Abstract

Florida’s state government stands out for its responsible fiscal policy, for maintaining a balanced budget, and for keeping taxes, expenditures, and government employment relatively low. In an era of government growth, Florida’s taxes and expenditures per capita and state government employment per capita have all been falling for the past two decades. During the recession that began in 2008, Florida cut state spending significantly to keep the budget balanced rather than relying on tax increases, a strategy consistent with its fiscally conservative policies. In some areas, however, Florida’s government has a bigger footprint. Florida places relatively high regulatory burdens on its citizens and businesses, and the government is a major residential property insurer in the state. Some institutional factors that might influence Florida’s fiscal policies are its legislature term limits, its lack of a state personal income tax, and the ability to amend the state constitution through citizen initiatives.