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Petersburg, Sarasota.

[music] - Coming up, Florida's unemployment rate has risen for seven straight months and is now above the national average for the first time in years.

What's behind the numbers, and should Floridians be worried?

Lawmakers are in Tallahassee this week for a budget special session.

The House and the Senate still $1.4 billion apart.

And the clock is ticking.

Could Florida be headed for its first-ever government shutdown?

And Florida tapped its hurricane fund to pay for immigration enforcement.

The feds promised to pay it back, but will they?

And could alligator Alcatraz be shutting down?

A New York Times report says it's closing very soon.

Plus, our big stories of the week.

It's all next on Florida This Week.

[music] Welcome back, everybody, to Florida This Week.

I'm your moderator, Lissette Campos.

Joining us today is Abigail Hall.

She's a professor of economics at the University of Tampa.

Her research focuses on public policy and political economy.

She's also a senior fellow at the Independent Institute.

Jeff Brandis, he spent 12 years in the Florida legislature representing Pinellas County.

He is the founder and president of the Florida Policy Project, a nonpartisan think tank tackling the state's toughest policy challenges.

And Michael Van Sickler, the veteran journalist, has covered Florida politics for the Tampa Bay Times for more than 20 years, and he's now overseeing the times political coverage as its political editor.

We welcome to all three of you.

We begin today with Florida lawmakers.

They've been in Tallahassee this week for a budget special session for the second year in a row.

They could not finish the job during the regular session.

The House and the Senate were $1.4 billion apart, the House pushing to cut spending, the Senate looking to hold the line, the sticking points, education, health care, public safety and funding for Everglades conservation.

If lawmakers cannot reach a deal by the end of June, Florida faces a partial government shutdown and that has never happened before.

Abby, I'd like to start with you.

When you look at the gaps, they seem so big and you are saying that it's a matter of priority.

Explain that to our viewers.

- So one of the things that we can observe from the size of the Florida state budget is that the state can afford a lot of things, but it can't escape trade-offs.

And so even though what we're looking at in percentage terms, is relatively small.

It's about 1% of the overall budget.

The real question is this debate about what do we do with those last dollars.

And that's where you're really seeing a difference in terms of the House and the Senate and different policy makers within those houses where we want to allocate those resources.

And that even though, again, it's small in percentage terms, makes a big difference in terms of what's funded and then what gets left on the table.

- And you've said that there's a bit of risk management involved in this as well.

It seems that the House is on one side of the page on this, and the Senate is on the other.

- Right.

So what we've seen historically, especially through the pandemic, is that Florida was actually in a really good economic position compared to a lot of other states.

But now we're seeing some growth slowdown.

We have a slowdown in construction.

We have higher than the national average unemployment rate.

And so then when you start thinking about budgets, policymakers also have to be cognizant of what's coming next.

So if those unemployment figures stay high, if you have a reduction in revenues, it's not just a question of setting the budget.

It's trying to look into the future to mitigate some potential risk.

- Jeff, you're 12 years in the Florida Legislature, ten years in the Senate.

How do you see all of this?

- Well, I think you have to put this in perspective of what's coming next.

I think that's the right way to think about it.

So in the upcoming year, so not this budget year, but in the next budget year, they're projecting about a $1.5 billion deficit.

And the following budget year they're projecting about $6.6 billion deficit.

So what they're trying to do is manage that.

So it's a soft landing.

And so they don't have to make these major cuts going, you know, as we go forward here.

I think we look at it as kind of globally what's going on.

You know there's still talk about the property tax exemption and what's going to happen there.

That's still an open question.

There is no way in my mind that we get to a shutdown scenario in Florida.

They will keep...they will stay in special session until they resolve this issue.

It may take a few more weeks.

I think what's going to happen is a lot of the work this year is going to happen behind the scenes.

Effectively, the budget has been, as you know, just finished being done at the at the committee level.

And now it's all kind of moving up to the presiding officer's level.

And so most of that negotiation is really going on behind the scenes.

And, and we're not going to see the traditional pattern of, of transparency, not that there's a ton of transparency, but the traditional pattern of transparency where we have committees meeting and budgets being passed back and forth.

I think you're going to see a lot less of that this year.

- When you look at the differences they are, they are significant in education.

The teacher pay raises.

The governor proposed $200 million.

The House and the Senate both are about $100 million each.

When you look at the schools of Hope, which are the charter schools that would co-locate in public schools that were had low population rates.

Um, the governor proposed $20 million.

The Senate proposed $6 million and the House was proposing zero funding for that.

Um, economic development.

You've got the Florida Job Growth Grant Fund program, which was established in 2017 for infrastructure funding, infrastructure programs, making sure that Florida has a diverse business economy.

And you've got the governor and the Senate asking for $50 million in the House proposing zero funding for that.

How can we?

- Well, because this is just largely posturing, right?

They want to get into negotiations.

They're-they're-they're-they're putting in some leverage points.

Right?

Okay great.

If you want me to give on this zero number, then you have to give me something else on, on another number that I want.

And so we see this in budget cycles.

It gets to posturing.

It will happen much more this year because so many of the decisions are being made by the presiding officers and not by the budget chairs of the committees.

Uh, and so there's a lot, I think, I think the earlier comment was personalities that are involved.

And I think that's absolutely correct.

I think that's what's driving this right now.

It's as much as it is about priorities of Florida.

There's a lot of personalities involved.

- Michael, how do you see this?

- Well, I was always I covered the legislature for like five years.

And reporters are always out in the hallway listening to the inside the door as a presiding officers are negotiating.

So we never got a real good sense of how do they sort out these differences.

And Senator Brandis probably has a much better vantage point than I do.

But the differences this year are stark, and the personality differences are stark.

So you have a House speaker who hasn't spoken with a governor for, what is it, a year?

- House Speaker Danny Perez and.

- You know, they're quite apart on Everglades spending.

I think they're proposing somewhere in the area of 200, 300 million in the.

DeSantis wants 800 million.

Part of it is posturing.

But this posturing does look like it's based in personality and philosophical differences.

So the House wants to hold the governor, the governor's office, more accountable in how it spends for emergency management.

There's no accounting for how DeSantis has spent a lot of this money, this rainy day money.

A lot of the money that we'll talk about it later.

But Alligator Alcatraz, all of that was no bid contracts, and if you try to figure out how that money was spent, nobody knows.

- And that's something that we're going to talk about in our next segment, sticking.

- Points in the negotiations between the House.

- And you should see, as the governor and the Senate are much more aligned than the House.

Yes, a lot of issues.

And so I think that's the kind of kind of gentle negotiations that are playing out right now, sometimes not so gentle.

- It's almost it seems like President Allbritton is kind of the referee between Danny Perez and the governor.

- You see these personalities.

You have a Miami speaker and then you have you have Ben Allbritton as the Senate president who's from Wauchula in a very, you know, rural district.

And they-they live in two different Floridas.

Right.

And so I think that's how you need to think about this.

You know, Ben Allbritton has really been focusing on the rural Renaissance program that he's been pushing.

But, you know, just in the last few hours, they have kind of abandoned that whole plan in the Senate budget.

So I think what you're seeing is like, there's a lot of negotiations going on.

Most of this is going to be happening behind closed doors at the president level and the speaker level.

And and obviously, the governor is trying to influence some of the discussion, but he's doing most of that through the Senate because he really has very little relationship with the House.

- With the House.

We're going to move on to our next segment.

Florida's jobless rate has now climbed for seven straight months.

It hit 4.7% in March, with more than 523,000 Floridians out of work.

That's a jump of 120,000 unemployed workers over the past year, one of the largest year- over-year increases of any state in the country.

And it's the first time in years that Florida's unemployment rate crossed above the national average, which stands at 4.3% since April.

The sector showing the most job losses over the past year was government.

The only sectors showing growth are education, health services, and professional business services.

Mike, I'd like to start with you.

What are some of the things that you're looking at in terms of the reasons, the factors for this large unemployment rate?

- Well, just following the news, I mean, what the Florida's economy is a three-legged stool.

You got agriculture, construction and tourism.

Well, we know the housing market is cooled, so it's probably is not too much of a leap to think that construction is slowing down.

And then with what's going on with the Iran war, gas prices going up, tourism is probably going to slow down because a lot of consumers are worried about future spending.

So with those two legs under our stool, this makes a lot of sense.

But I would maybe ask the economists on our panel.

- I will ask her next.

Headlines versus the trends.

Explain.

- So one of the things that I always encourage my students to do is there's one thing to look at kind of the big headline number, that 4.7%, but one data point doesn't necessarily tell us all of the information that's relevant.

What's more important, from my perspective, is looking at the trend.

And so here we've seen seven consecutive months of a cooling labor market in Florida.

And one of the things that I think that this really highlights, and it relates to a lot of issues that are being experienced, not just in the Tampa Bay region, but also throughout Florida, is that Florida's economy is particularly susceptible to a lot of national policy issues.

So when we're looking at kind of those big national headlines, so the war in Iran and oil prices, we're looking at interest rates and not historically very high, but high compared to, say, 5 or 6 years ago, relatively high interest rates.

And I know people are sick of talking about it.

But trade policy.

We're a very import-export heavy economy in the state of Florida.

And so this back and forth and uncertainty related to tariffs undoubtedly also has a really important role in kind of the overall economic picture, including our unemployment numbers.

- And does that make Florida more susceptible than other states when there are changes in tourism industry and the construction industry?

- So it certainly makes Florida more susceptible.

So we are very heavily driven by tourism and construction.

So if you think about things like oil prices, you're talking about, are people still going to be coming here?

What's the price of shipping things into and out of Florida construction prices or interest rates and slowing down of construction projects?

All of those things are relevant.

The tourism piece is particularly important when it comes to energy prices, because what we see there is that even when, say, other states might see a reduction in their oil and gas prices.

Florida's tend to stay higher for longer because we have all of this extra demand because of the tourism.

- One of the things that we found striking when we looked at the data is that a large number of the unemployed in this statistic are the young professional, the college, the recent college graduate who is finding it more difficult.

They need more time to find that first job.

In your Florida policy project, you've talked about the need for affordable housing, for policies that really address the affordability so that young professionals can stay in the region.

What do you see in all of this?

- Well, look at the average first-time home buyer in Florida today is 40 years old, right?

If we just go back a decade or even a little bit more than a decade, it was like late 20s, right?

But now we've seen this kind of growth because the average house in Florida costs the average kind of house is $420,000.

And so it's just amazing to see kind of people are renting longer.

They're struggling to kind of build up the kind of down payment that they need.

Um, but I think AI is really beginning to, you know, not so much.

I think AI is beginning to keep businesses from thinking about, all right, where are we going to make these massive expansions?

Are we going to see how AI is going to play out over time?

What are we thinking here?

Um, I was watching a commencement speech at UCF the other day on, on, on TV.

And the commencement address was talking about how AI was playing out.

And, and the students booed her.

- They were booed.

She was booed.

- The rise of artificial intelligence is the next industrial revolution.

Oh.

Whoa.

Only a few years ago, AI was not a factor in our lives.

[applause] - Half these students probably use ChatGPT to get through college, and now they're using, they're booing her for saying, you know, it exists.

So I think this is I think, you know, we need to be thinking of AI in many ways as kind of the new electricity.

Every business is going to have to adapt to this.

And, and I think for college graduates, there's just uncertainty out there about kind of this new electricity that exists today.

- And I think that uncertainty extends in other places as well.

So it's not just on the parts of, of students.

And I think you're right that businesses are not sure yet quite how AI will play out.

But one of the other things that we know from all of the uncertainty, especially over the last year and a half, is that when businesses can't effectively plan far ahead, so six months, a year, two years, they tend to adopt this wait and see type of attitude.

So they may be disinclined to expand businesses or expand their personnel.

And then in thinking about this labor market.

Specifically, businesses, if they are hiring, may have the ability to get workers with more experience than, say, your new college graduates.

And so it's a really rough scenario for a lot of Floridians, but especially those younger people who are just out looking for their first jobs.

- We're going to move on to our next topic.

Florida could soon close the immigration detention center dubbed Alligator Alcatraz, and the price tag so far is staggering.

Florida spent nearly $460 million on immigration enforcement in the past year.

That's at a cost of more than $1 million a day.

All of it came from the state's hurricane emergency fund.

The state is still waiting on $608 million that was promised from the federal government as a reimbursement.

But most of the spending centers around alligator Alcatraz, which received no bid contracts to build and to operate deep in the Everglades.

And now the New York Times reports that vendors were told this week that the detainees will be moved sometime in June, and the site will then be dismantled shortly thereafter.

Governor DeSantis maintains that the detention camp was always meant to be temporary.

Jeff, I'd like to ask you, when you look at the amount of money that's been spent, so many voters were told that this is something that we would be reimbursed for.

How do you how do you see this playing out?

- Well, I hope they do get reimbursed for it, right.

I don't know that is the case.

Right?

I think that there is still I think there's discussion about there was a promise made, but I don't think there was.

I haven't seen it in writing.

As with many of these plans, I think, you know, I think overall I think this was a mistake.

I think this mistake could have spent their money on existing prisons, opening reopening facilities, and then potentially had something permanent to, to house people in afterwards.

I mean, one of the items in the state budget actually is to build a new prison.

We have prisons that are vacant today that they could have spent half the money on and, and put people in those facilities versus take them probably to the worst location in Florida, which was really there just because of the alligators.

Right.

That was the main the main attraction to this site was it's surrounded by alligators.

It wasn't like we didn't have other sites we could have housed them at.

In fact, we have another site that we're currently is still open and that we're currently housing people at.

So that could have been an option.

I think overall, I think this was I think this is an issue where the state legislature gave the governor a lot of rope on with this budget authority, and they should have pulled it back.

They should have demanded more accountability in these dollars.

But I think the governor saw the opportunity to take advantage of the emergency spending powers that he has without going to the legislature and decided to, you know, go, go do this really quickly, issue a lot of contracts very quickly without the typical due diligence and contracting process the state normally follows.

- I'd like to talk about that due diligence and the research that goes into it, the strategy, if you will.

Abby, you've talked about this being an example of a temporary policy that was made without really perhaps looking at the long term impact.

Can you explain that to our viewers?

- Sure.

So one of the things that we look at when we think about kind of the economics of the politics is understanding, why do politicians or political actors make the decisions that they do?

And why do voters hold or not hold political actors accountable?

And so one of the things that we see with a program like this, as well as others, is that the short term payoff for some political actors is really obvious.

You know, we get to be hard on immigration.

We have this very clear output of, hey, we're going to build this facility, we're going to detain people here.

But then the question is, well, what comes next?

And so there's this very clear scene component of the policy.

But now we're seeing what happens on the back end, which is we don't know if we're going to be reimbursed as a state.

And even if we are.

In the meantime, you have diminished flexibility.

Those funds that were utilized for this project can't be utilized elsewhere.

So then the question becomes, well, what are voters going to do?

And what we find is that ultimately, when it comes time for reelection, voters tend to not necessarily remember these policies that are relatively temporary.

So it might be important to them right now.

But will it be influential?

Will they hold policy makers accountable when they go to the voting booth next time?

And there the data is a lot less optimistic.

- Mike, this emergency fund was really the point of contention in the regular session.

Um, Danny Perez even saying that, um, they had to put limits on how these funds are used.

- There's no accountability.

So, um, what Abby was saying, um, on the front end, you have a political actor, Ron DeSantis, who is doing a lot of this to, you know, he seemed tough, uh, by creating this alligator Alcatraz.

Um, and it got a lot of press.

The name itself, there's still t shirts.

You go to any rally for any Republican, and there's still Alligator Alcatraz.

- People are taking selfie pictures in front of the green sign.

- It's great branding Alligator Alcatraz.

- But when you look at the future for Ron DeSantis, it's uncertain because of other things that have happened with his relationship with Trump.

So does he have a job with the administration?

That's not that's not clear.

There's a lot of reporting that suggests that avenue is closed for Ron DeSantis.

So what's he going to do over the next two years?

But as far as voters not having long memories, think about this.

The New York Times, Patty Massie has done some great reporting on this, where they have quoted vendors saying, yeah, we haven't been paid.

And by the way, we're the same vendors who the state uses for hurricanes.

So if we're not paid by then, um, we could very well be looking at a scenario where the state's supply of vendors is just not going to line up because they haven't been paid in months.

- But if and when we are reimbursed, the money would be set aside so that the vendors would be paid for their services first.

It wouldn't automatically go into the fund again.

- They're going to get paid, right?

I think the simple truth is we're going to have a new budget here in June.

They're going to re-appropriate some money.

And those funds, those funds are probably waiting to get paid until July 1st, but they're ultimately going to get paid.

I think the bigger the kind of bigger question was, did we ever need this facility?

Was this just a huge distraction and a waste of time because we had other facilities around the country that could have done a lot of what this did without the $500 million.

- At 1 million a day.

Is this like the fountain blue?

I just don't understand where the money went.

I mean, it just seems like very, very... - Well things - Add up when you have to drive everything in.

To a place that's in the middle of the Everglades.

- It's definitely, well, they chose that location, but I mean, the cost to run it is.

- They chose it for the alligators.

They chose it for the optics.

Right.

It wasn't like we had a massive problem with escape from immigration facilities, and that the only way to stop that problem was to create a mode of alligators around it.

No, the whole point was the alligators were there and we got this great catchy name.

It's like some mid-level staffer in the governor's office said, this would be a great idea.

And he's like, all right, let's do it.

And then they figured out how to get it done.

And they had to.

They had the access to the money and could do it all before anybody kind of figured it out.

- And came up with a name.

And there you go.

- There you go.

The fallout.

- Will be.

- No, there won't be any fallout.

- You don't think?

- I don't think so.

I really don't think so.

- History suggests that you guys are totally correct.

[laughter] You never say never.

- Now it's time for our big stories of the week.

It's a segment of the show when we highlight issues that our panelists know best and that our viewers might want to know more about.

Jeff, I'd like to start with you.

You wrote a wonderful op-ed talking about the housing affordability crisis and how the middle income is being squeezed out.

Um, tell us about, about the most important aspects.

- Yeah.

So I think what you can find is that the wealthy are doing fine.

The middle are getting squeezed and there's really nothing at the bottom end.

And it's not because we don't want things at the bottom end.

It's just because cities and counties have largely regulated it out.

And frankly, Florida has no long term housing policy, right?

It has no strategy.

And so, you know, we have the SHIP program and we have a sale program, which are two kind of programs that operate within the government on affordable housing.

But I would argue we have no rudder.

And so I think the state is kind of rudderless on its housing policy, and that-that lack of incentives is what's driving cities and counties to kind of focus on higher value homes.

But what's happened is we've forgot about the entry level housing.

And for most people, 420,000 is too far.

And that's why average first-time home buyers are 40 years old.

So, you know, I encourage people to really think about what's going on in housing.

We have radically more sellers than buyers right now in the housing market.

And it's really it's a really challenging market right now.

- Abby, tell us about the work that you're doing with your students in the Adam Smith Society, students in the economics department?

- Yes.

So in the Sykes College of Business at the University of Tampa, we're really working with our econ students to help them build some important skills that we think are going to help them in this really tough labor market that we were talking about.

So we've been working with our students on developing analytical skills, presentation skills, as well as research and writing skills about a variety of topics, but including a lot of those that are directly relevant to Florida and Florida businesses.

So things like trade policy, things like energy policy, as well as other maybe bigger policy issues like human trafficking and things related to the prison systems.

- That's very.

- Satisfying work.

Mike, tell us about your interview.

You did a one on one.

- Well, I'm on the campaign trail with the gubernatorial candidates.

It's a lot of fun.

But the other, I think it was last week I was out.

Byron Donalds was in town, and I heard him give a talk to some voters.

And he was talking about the importance of growth management, which if you're a Republican, that's incredible.

That's a that's quite a change in heart.

Because if you remember in 2011, Rick Scott got rid of the Department of Community Affairs, which basically had the state function for growth management.

So now you have a Republican governor candidate talking about bringing it back as far as some sort of oversight, some oversight.

He's he's still kind of working it out, but I thought it was noteworthy and kind of a sign of where we are.

Because the flip side to this affordability issue that we're all talking about is what about for existing residents who are like looking at the communities that they live in, talking about drainage, traffic, what's going on?

They don't necessarily see an improvement in their lives.

- It's so great to hear your perspectives on everything.

Thank you for helping us and taking time out of your busy schedules to join us.

On behalf of the entire team here at WEDU.

Thanks so much for watching.

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