Summary:
• Older people will dominate population growth in coming years.
• How will state services be affected by so many older residents?
• Analysis shows $2,000 net benefit to the state’s economy from each retiree.

Are Florida’s boomers a bust? For decades, retirees have flocked to the Sunshine State.

Between 1950 and 2008, the 65 and older population doubled. Now the economic recession is slamming the state like a hurricane, and some wonder if an expected boom in the 65-plus population might cost the state too much.

Unemployment is running over 11 percent, well above the national figure. Florida ranked third in home foreclosures in 2009, behind only Nevada and Arizona. And several bad hurricanes in the past decade have driven up insurance rates.

Most troubling, though, was the first decline in population growth since World War II. From April 2008 to April 2009, Florida lost nearly 60,000 residents, according to the University of Florida’s Bureau of Economic and Business Research. Historically, new residents fueled a robust housing market. Consequently, since Florida’s tax base relies on property and sales taxes, revenue also fell.

While some Floridians fled to Georgia and North Carolina in search of cheaper housing, the state’s long love affair with older Americans may not be over.

A recent study conducted for the legislature by the Office of Economic and Demographic Research made these projections:

• During the next two decades, Florida’s 65 and over population will swell to more than 6 million and account for almost 60 percent of the state’s population growth.

• Of the almost 24 million people who will live here by 2030, more than a quarter of them will be 65 and over.

Will such a high percentage of retirees fuel economic growth or strain public services?

“The answer is not yet conclusive,” said Amy Baker, director of the legislature’s Office of Economic and Demographic Research, which commissioned the study. “We know baby boomers are going to be spending a longer period in retirement because they’re retiring a little earlier and their longevity is greater. The question is, do they have enough assets to last their entire retirement?”

If not, Baker warned, some may wind up on taxpayer-funded Medicaid or in public-financed nursing homes.

But David Denslow, a research economist with the Bureau of Economic and Business Research, counters that Florida spends relatively little on each Medicaid recipient—$7,604 a year compared with the national average of $10,691. “One reason,” he said, “is that many retirees, when they become frail, go back north to where a child, usually a daughter, lives.”

Lori Parham, AARP Florida state director, said each retiree contributes a net benefit of $2,000 to state and local budgets annually.

“What’s baffling here is that the debate is about costs to state government when it ought to be about helping Florida’s economy and restarting our housing market. All the evidence shows retirees are a net benefit,” Parham said.

Sen. Don Gaetz, R-Niceville, said the problem is not too many retirees, but too few jobs in industries for younger workers beyond the traditional economic drivers of tourism and construction.

“Retirees are a huge source of support for state and local governments because they support our schools with their property taxes,” said Gaetz, chairman of the Senate Health Care Committee. “But they don’t represent a cost because they don’t tend to have children in school.”

Others have drawn the same conclusion.

A study for the Florida Department of Elder Affairs by Thomas, Warren & Associates found that spending by residents 50-plus supported 4.2 million jobs in a state workforce of 7.5 million in Florida.

“Retirees are often buying a second new or existing home,” says Edie Ousley of the Florida Home Builders Association. “That helps move excess stock off the market, and we put more Floridians in the construction industry back to work.”

“Florida is by no means going to be a disaster,” Denslow said. “By 2020 or 2025, the number of new retirees is going to increase 75 percent. That’s your potential market, and we’ll get some share of that.”

Ron Hayes is a freelance writer based in West Palm Beach, Fla.