April 23, 2014

How Many Retirees?

Cynthia Barnett | 2/1/2003
When members of the Destination Florida Commission heard a briefing on Florida's springs last fall, they got what they asked for: A state Department of Environmental Protection official delivered a glowing report on the wonders of the 600-plus natural springs nestled in the forests of north and central Florida.

Retirees' Impact
A study funded
by WCI found that
in 2000, Florida
residents over 50:Made up 33%
of the populationAccounted for
52% of spendingPaid 47% of all
residential property
taxesContributed more
than $3.5 billion
to charityVolunteered a
total of
7.5 million daysCast 48% of the
votes in the
presidential election

The commission was developing a plan to entice retiring Baby Boomers to Florida, and the DEP official played to his audience, dutifully keeping his focus marketing-friendly. Surprised at the number, beauty and relative obscurity of the springs, commission Chairman T. O'Neal Douglas remarked that they're just the sort of amenity the state should highlight in its sales pitch.

Just two weeks later, however, members of the commission might have come across a much different picture of Florida springs: A newspaper reported how some have dried up, some are opaque with algae, and others are so polluted with human waste that they're unfit for swimming. The same DEP official who briefed the commission told the newspaper that the springs "are in serious trouble, and we've taken them for granted for a long, long time."

The conflicting images of the springs -- and indeed, the commission's deliberations over the past six months -- highlight a division that now seems to cleave nearly every issue in the state's public life. On one side, a blithe optimism toward growth and a spotlight on the state's unique assets to ensure an inflow of new residents and wealth. On the other, questions about why Florida should work to attract more residents before it takes better care of those who live here now and the natural features that have traditionally lured them here.

Destination Florida was born of the perception that the state is losing ground in the competition for retirees -- just as a wave of 76 million Baby Boomers, flush with savings and inheritances, is ready to retire. Last June, Al Hoffman, CEO of WCI Communities and a major fund-raiser for Gov. Jeb Bush, wrote the governor urging a state-sponsored effort to market to retirees the same way it markets to tourists.

Hoffman's appeal included a memo, talking points and 60-page study commissioned by WCI called "The Impacts of Florida's Mature Residents." The study found this trend in 1980 and 1990 Census data: The percentage of seniors migrating to Florida had declined and was predicted to fall by another 2% in the 2000 Census. It went on to analyze 13 other retirement states: Alabama, Arizona, Arkansas, California, Georgia, Mississippi, Nevada, North Carolina, Oregon, Pennsylvania, South Carolina, Texas and Washington, focusing on their efforts to attract retiring Boomers.

"North and South Carolina, combined, attracted more relocating retirees than did Florida in 2000," Hoffman's memo warned the governor. "We must act before Florida loses untold billions in revenue and its sustained quality of life to other states."

Acting quickly
The study also purports to "shatter the myth" that Florida's older residents are a drain on state resources. While seniors provide the state with $2.7 billion from sales and use taxes, the study found, they cost Florida only $1.28 billion in health and human services.

Bush's creation of the 15-member Destination Florida Commission followed quickly on the heels of Hoffman's report. To lead the effort, the governor appointed Douglas, the retired chairman of Jacksonville-based American Heritage Life Insurance Co.

Douglas, initially skeptical of the effort, says he was floored to learn the economic impact seniors have on Florida. "When you look at the numbers, you begin to understand the pro rata share that they pay for the cost of operating this state, from building roads to parks to infrastructure, and how important it is that we at least maintain the balance we have now," Douglas says. "If we start to lose that economic power, it will have to be replaced by something else. We will have to find another source to pay my way and your way."

While he came to share Hoffman's perspective, Douglas steered a neutral course as he led the commission. He fended off numerous requests, for example, from developers who wanted to show off their senior-friendly communities.

Ironies
The Destination Florida effort featured its share of irony, however. Douglas, at 67, reflects the demographic of the majority of members, who during meetings sometimes seemed out of touch with the tastes and preferences of the Boomer generation. Another irony: Several members, including Douglas, had to fly in for meetings from summer homes in the mountains of western North Carolina or other rival retirement states.

Meanwhile, the state often cited by the commission for its aggressive marketing efforts had done an about-face. Destination Florida's meetings were closely monitored by Ken Plonski, a WCI vice president whom Hoffman had hired away from the same position at Del Webb, developer of Arizona's Sun City and other mega-retirement communities. In 1995, Plonski helped lead a successful effort by Arizona to lure more seniors that brought the state up to third behind Florida and California in luring retirees. By 1999, however, Arizona taxpayers and lawmakers began questioning whether the benefits of having more elders outweighed the healthcare costs and transportation problems they were creating. The state stopped funding the effort.

Questions
While state government officials from the DEP to the DOT seemed to tell Destination Florida what they thought it wanted to hear, others didn't hesitate to challenge its mission. A torrent of letters questioned the need for marketing as they expressed concerns over traffic, pollution and other pressures created by growth.

"I have moved to what I thought would be 'paradise' only to find there are critical water problems and heavy-duty sinkhole activity," wrote Barbara Down of The Villages. "With regard to water, we are told to conserve -- which we do -- and then they use the adjusted water volumes to justify new growth."

Others took issue with some assumptions in the WCI report. Revenue generated by older residents outweighs their costs in healthcare and other services only because the state so underfunds elder services, complains E. Bentley Lipscomb, state director of the AARP. For example, 15,000 elders remain on Florida's waiting list for basic services such as home healthcare that would help keep them out of nursing homes.

Douglas and other commission members felt they shouldn't sweep such problems under the rug. Destination Florida's final report -- which goes to the governor this month, in time for lawmakers to consider funding the effort -- is expected to recommend that Florida improve its services to elders.

The report also will draw attention to problems in Florida's construction lien laws and other areas of home buying where seniors testified they have been harmed. It will raise concerns in the healthcare arena, such as the exodus of doctors from the state amid hikes in medical malpractice insurance and dips in Medicare reimbursement rates. And it is likely to suggest more tax relief for seniors.

But the report's major thrust remains a feel-good marketing campaign: First, an effort to convince those already here that seniors are a good thing for the state. "We've learned that most Floridians think seniors are a drain on the state, and nothing could be further from the truth," says Maritza Gutierrez, owner of Creative Ideas Advertising in Miami and the commission member who crafted the marketing plan. (At 42, she is also the youngest member of Destination Florida.) "In many ways, they are the engine that keeps Florida running."

Second, the plan would involve the most concerted effort state government has ever made to lure retirees -- a task that over most of modern Florida history has been carried out by developers with a vested interest in selling homes and condos.

Marketing tactics
Gutierrez's tactics include targeted pitches in cities such as New York and Chicago; campaigns in specialized magazines read by affluent Boomers; and a group of spokespeople she calls Florida "ambassadors" -- well-known Boomers who have retired to the state and carry credibility with their generation.

Douglas would not speculate on how much Destination Florida's recommendations could cost taxpayers. But he insists that not carrying them out will cost the state even more. "This is a healthy, thriving industry that gives a lot to Florida," he says. "Approximately 24% of the general revenue of this state comes from the senior community. If you lose that percentage, the balance of Floridians will have to pick up the difference or replace it."

The fact is that retirees will continue to come to Florida no matter what the state does, says Gene Warren, president of Phoenix-based Thomas, Warren & Associates, the economic consulting firm that conducted the WCI report. Florida needs to maintain its share of the most desirable retirees -- those with plenty of money.

"What goes unsaid is that you want to lure not just retirees, but resourceful retirees -- retirees with good income," says Warren. "The lower-income retirees are going to come anyway. What Florida needs more of are the wealthier retirees."

How Floridians Feel
Here are excerpts of letters that Gov. Bush and the Destination Florida Commission received regarding the state's new efforts to lure more retirees:

"I would think it would be more to the point to ensure that those of us who live here now will have enough water without being severely restricted in its use, adequate roadways and necessary services, which are overtaxed even as we speak, before inviting more hordes to cross the state line and create more problems than we already have."
-- Barbara Matthews, Tampa

"I hope the committee considers the fact that Florida is the only state that taxes assets and no longer considered by many as a 'tax friendly state.' Hopefully the committee will have the courage to suggest the elimination of the intangibles tax."
-- Roberta Shaw

"I would rather have you concentrate on attracting clean industry. We need more high paying jobs rather than more seniors -- and this is a senior saying this."
-- Joan Barnes, Orlando

"We need more seniors like we need more sinkholes."
-- Bill Nichols, Winter Park

"When I moved to Florida, I brought three retirement pensions, three health insurance policies and two prescription drug coverages for both myself and my wife, which means that we pump thousands of dollars annually into the state and local economies at a cost of nothing to anyone. ... I hope that Floridians will stop and think about this next time one of you 'flip me the bird' on the highway, simply because I refuse to drive more than 20 mph above the posted speed limits, as they arrogantly do."
-- Bernard DaPron, Lake City

"We have too many people here now and St. Joe is going to fill up Northwest Florida. Let's discourage more people before we lose all quality of life."
-- John Fishel

"Kids between the ages of 15-20 are a little disturbed by these people who move in thinking, 'this is going to be peace and quiet, no kids, no noise, and no problems whatsoever.' Where I live in Port St. Lucie, there (are) a whole bunch of seniors or retired people who just sit outside and yell, 'Hey you! Get out of here you troublemakers, hooligans and so on at the kids that go by."
-- Michelle Pass, high school student, Port St. Lucie

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