If you’re not quite ready to leave the States in pursuit of lower taxes, what’s the next best thing? For many, it’s the Sunshine State. Here’s what you need to know about the personal finance landscape of Florida—including the hidden costs.
According to the US Census Bureau, between July 2021 and July 2022, Florida experienced the highest percentage increase in population of any state with a growth of 1.9%. (Second place went to…Idaho with 1.8% growth. Talk about a “root” awakening. 🥔) NPR noted in February 2022 that this physical shift may correspond to political polarization—and before that in January 2021, researchers at the University of Wyoming found that polarization negatively affects personal finances.
But Florida doesn’t have income taxes, which is great…right? 👀 Nine states—Alaska, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming, and the star of our show today, Florida—don’t impose state income tax. But that doesn’t mean all states without income tax have the lowest tax burden, which includes property tax, sales tax, individual/corporate income tax, and estate tax, among other taxes. According to the Tax Foundation, Florida is only the 11th lowest in terms of tax burdens.
Beyond taxes, there are other financial considerations to think about before you move to Florida.
Safety net. If you fall on hard times, the average $236 weekly unemployment check will feel like pennies compared to the cost of living. Florida’s unemployment ranked dead last in the nation, according to Forbes. (Likewise, the ACA expansion of Medicaid didn’t make it to Florida either.)
Cost of living. Car insurance coverage in Florida is 56% higher, or roughly $1,000 more per year, than the national average of $1,771. Rent is rising fast in Florida, too, and the state forbids rent control. If you want to buy a home, you’ll pay more in homeowner’s insurance and flood coverage.
Future prospects. Speaking of flooding, your long-term viability may be cut short by climate change, meaning beachfront property values could crumble like a sand castle.
Despite the population boom, many Florida residents have moved out due to the high cost of living, low wages, and hellish heat. So if you do move to the Sunshine State, be careful about getting a financial sunburn.
By Bill Davis
February 13, 2023