Miami-Dade taxable sales plunge $3 billion; experts differ on turnaround projections
By Scott E. Pacheco
Miami-Dade taxable sales fell about 8.6% — more than $3 billion — in the year ended July 30, the state legislature's research arm reveals.
But while an analysis by the legislature's Office of Economic and Demographic Research forecasts a turnaround statewide by spring, economics experts differ on how long it will take for the tide to turn in Miami.
"We're really going to need a real estate and construction turnaround and that's going to be slower — a lot of turnaround [talks] are coming from national projections," said Peter Thompson, chair of the Economics Department at Florida International University. "Construction [in Florida] is about twice the national average — Florida recovery is so wrapped up in the foreclosure problem," he said. "I do believe Florida is going to have a slower turnaround than the rest of the country."
But Manuel Lasaga, president of StratInfo, said international business will buoy Miami-Dade and the county will slightly beat the nation's pace.
Miami-Dade's employment in June was down 3.8% year-over-year. By comparison, all of Florida was down 5.3% and the US down 4.1%, Mr. Lasaga said.
"International business continues to cushion the blow of our recession," he said. "The depth of our real estate contraction would have had a more devastating impact" without the foreign investment.
Still, several industries have taken a beating.
In Miami-Dade in June, building investment took the biggest hit from June 2008, with taxable sales plunging 21.6%. Consumer durables fell 15.9% while tourism and recreation taxable sales fell 10.9%. Consumer nondurables did the best year-over-year in June but still were off 5%.
Overall in Florida, general revenues dipped $3.1 billion in the year ended June 30, from $24.1 billion to $21 billion. Sales tax makes up about 75% of general state revenue.
"Four years ago when we first started seeing declines it was really linked to the housing market — those were the ones that got hit first," said Amy Baker, coordinator of the Office of Economic and Demographic Research. "Four years later it's pretty widespread. You really see the impact hitting every sector that we have."
Ms. Baker said the falloff in collections started in fiscal 2006-07 and isn't to pick back up until 2010-11.
For the year to end June 30, 2010, projections have statewide revenues down about $332 million to $20.7 billion.
"This year what we are going to see is a slowdown in the decline… with the decline stopping by next spring 2010," she said.
In aiding the recovery locally, Mr. Lasaga cited emerging international markets, slower job losses and the likelihood tourism will rebound as foreign currencies gain on the dollar.
He said Miami could be in better position but has been hurt by immigration and foreign investment laws that have discouraged investment.
"We see a lot of capital that normally would be going to Miami is going to Panama and other locations," he said. "We could have probably attracted a little more investment from foreign investors that would have helped to put a floor to real estate values."