March 20, 2020

Florida Ranks in 'Bottom Five' States for Recession Preparedness

TALLAHASSEE, Fla. – Florida is among the five states that are the least prepared for America’s recession, which is taking hold amid the COVID-19 pandemic. According to a new report from the Center on Budget and Policy Priorities, Florida ranks in the bottom 10 in three out of four measures of recession preparedness. As a result, state responses as much as federal ones will be essential in the weeks and months ahead.

Florida’s weak Unemployment Insurance System, failure to expand Medicaid, and inadequate reserves contribute to the Sunshine State’s low ranking.

“In the wake of a crisis, whether it be an economic recession, natural disaster, or pandemic, people with low income are hurt the most,” said Sadaf Knight, CEO of Florida Policy Institute. “The top priority for state and federal lawmakers must be protecting residents from job losses and wage cuts and preserving the safety net.”

Even the highest performing states will struggle to manage the fiscal and public health crises that are currently unfolding. While the federal government’s proposed economic responses will provide much-needed assistance, federal aid to states and localities remain more essential now than ever. 

“State policy is very important in determining how people fare in a recession,” explained the report’s lead author, Michael Leachman, senior director of state fiscal research at CBPP. “This recession is likely to be significant and difficult for all states – but especially severe for those that have failed to prepare.”

In order to properly prepare for a recession, according to the report, states need:

  • Adequate budget reserves to help lawmakers avoid cuts to essential services, which are especially important in times of economic crisis. Florida ranks 41st for Moody’s “Stress Test” and 34th for total reserves as a percent of general fund expenditures (8 percent).
  • Strong unemployment insurance systems, which affect how well families do during and even after a recession. Florida’s unemployment insurance system (called Reemployment Assistance) is especially weak and ill-prepared to buoy Floridians needing assistance because of the crisis. The recipiency rate (percentage of those eligible who receive the benefit) is only 11 percent, ranking Florida 47th. Additionally, Florida’s average weekly benefit level is only 26 percent of the average weekly wage.
  • Accessible Medicaid coverage to make it easier for families who have lost jobs or are suffering other adverse impacts to get health care. Florida has yet to expand Medicaid, leaving nearly 400,000 Floridians in the coverage gap. These individuals and their communities are consequently more vulnerable during a health crisis like the COVID-19 pandemic.
  • Affordable colleges and universities to allow residents to boost their skills and training when jobs are scarce. Thankfully, Florida’s public colleges and universities are some of the most affordable in the country. This will help when unemployed Floridians seek to bolster their education and training.

Florida’s state and federal lawmakers can and must do more to protect residents from health and economic hardship. This includes, as a start, significantly increasing the maximum amount and take-up of unemployment insurance benefits and expanding Medicaid.

FPI is an independent, nonpartisan and nonprofit organization dedicated to advancing state policies and budgets that improve the economic mobility and quality of life for all Floridians.

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