We all know that South Florida isn’t cheap. But it’s also nowhere near as expensive as the most expensive destinations across the country. The benefit of not having a state income tax, shared by only four other states, dramatically improves the cost of living dynamic relative to most. It’s offset to a certain extent by higher local property taxes and higher than average housing costs but put it all together and here’s what we see.
The Tax Foundation just completed the annual study on The Relative Value of $100 and $100 doesn’t go quite as far as it did last year but it's not all bad news. Last year $100 provided better than average buying power at about $100.10. That’s not the case any longer. Florida now ranks 36th in the relative buying power. The buying power of $100 dropped by 70 cents to $99.40 compared to the rest of the country. That’s a decline in affordability of just under 1% over a year ago.
One hundred dollars goes furthest in Arkansas where it has the buying power of $117.23. On the flip side $100 only nets you $84.67 worth of value in Hawaii with New York now under $86 and Cali at $86. While Florida isn’t cheap this analysis illustrates quite clearly the overall value proposition of Florida compared to most other large states, especially northeastern states like New York. You’d have to earn nearly $114 in New York to retain the same buying power of $100 in Florida. You might imagine that the conveyor belt from the northeast to South Florida is only going to accelerate based on this information. Also, it’s a reminder to appreciate South Florida. Most people wish they were here, and generally, the grass isn’t greener elsewhere.
Photo by: Richard Levine/Corbis via Getty Images