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Tallahassee, Gainesville Resist Recession

July 1, 2010 - 6:00pm

Seeking a lift from Florida's economic doldrums? Tallahassee and Gainesville may have just the ticket.

While the Sunshine State suffers from double-digit unemployment and is mired in one of the worst real estate downturns in its history, Tallahassee and Gainesville aren't feeling the pain so acutely.

As in college towns and state capitals across the country, the two Florida cities have proven more resistant to recessionary times.

"We have a more stable employment base, not prone to the boom or bust cycles of construction. Our highs are not as high during boom periods, but our lows are not as low," said Bob Woods, communications manager for the city of Gainesville, home of the University of Florida.

"Tallahassee is very fortunate to be home to three major institutions of higher learning and the capital of the fourth largest state in the country," Tallahassee Mayor John Marks said."The knowledge and human capital associated with institutions of higher learning helps to position Tallahassee as a place for growth and innovation, even during an economic downturn.

"Additionally, the relatively stable employment base related to state government can have a stabilizing effect on the local economy," Marks said.

Statistics from UF's Bureau of Economic and Business Research bear out those observations.

  • Housing: Where the median sales price plummeted 43.8 percent from 2007-2009 statewide, Leon County (Tallahassee) prices dipped 15.6 percent and Alachua County (Gainesville) fell 20.9 percent.
  • Income: Florida's per-capita income rose a modest 2.4 percent from 2006-2008. By contrast, incomes climbed 4.1 percent in Tallahassee/Leon and 4.7 percent in Gainesville/Alachua.
  • Bankruptcy: Personal bankruptcies stood at 4.97 per 1,000 statewide in 2009. Gainesville was 1.92 and Tallahassee was 2.74.
  • Unemployment: While the state's jobless rate was 10.5 percent, Gainesville weighed in at 7.1 percent and Tallahassee was 7 percent.

Though these figures may not be much to brag about, demographers say Tallahassee and Gainesville do benefit from higher-than-average university and government employment.

Gainesville lists 28.7 percent of its workers in the "government" sector and 17.6 percent in "education and health services."

Tallahassee has 34.3 percent of its workers in the government sector and 11.8 percent in education and health services.

The state average is 27.3 percent for the government-education-health services sector combined.

Home to two major universities -- Florida State University and Florida A&M -- Tallahassee has the added benefit of being the capital of the nation's fourth largest state, which has a $70 billion annual budget.

Each spring, the city swells with legislative activity, and Tallahassee is a year-round home base for powerful law firms and corporate lobbyists who ply their trade at the seat of government.

Floridians might be surprised to learn that the Tallahassee region actually has a higher educational attainment level than Gainesville. Some 41.7 percent of Leon County residents hold bachelor's degrees or higher, compared with 38.7 percent in Alachua County. The state average is just 22.3 percent.

Oddly, however, per-capita incomes for the two well-schooled cities lag the state average. In 2008, the latest year for which data were available, the figures were: State, $39,064; Tallahassee, $35,900; Gainesville, $34,713.

The two college/government towns also registered a more pronounced slump in January 2010 taxable sales. Compared to January 2009, Tallahassee's taxable sales dropped 5.2 percent and Gainesville dipped 5 percent while the state average slipped 4.5 percent.

As with communities across Florida, officials in both cities say they are scrambling to raise revenue.

On July 1, Tallahassee launched a red-light camera operation that it hopes will bring in $1.5 million during the next fiscal year.

In Gainesville, Woods said officials are "struggling with the budget. We need to cut $8.3 million to balance it." The city recently instituted a four-day work week in an effort to curtail operating expenses.

Indeed, the two municipalities feel the effects of a two-edged sword. Though the cities benefit from steady government-based employment, those public-sector workplaces pay no property taxes.

"Fifty-four percent of the total taxable value here is off the (property) tax rolls. It's a really huge government footprint," Woods said of Gainesville.

Nevertheless, with brighter employment prospects, both cities buck the trend when it comes to population growth.

Woods said Gainesville is gaining residents at the expense of recession-batted communities elsewhere in Florida.

While the capital of the Gator Nation grew just 0.2 percent between 2000-2006, its population has climbed 0.6 percent a year since then -- just as other Florida cities' growth curves were flattening.

Tallahasse's population is expanding even faster -- 1.2 percent a year. And Tallahassee city planner Ed Young said that figure may be understated.

"The Census always underestimates college-town population," Young said.

Gainesville City Manager Russ Blackburn says his community's "economic partnership with the University of Florida has fostered a stable local economy.

Applauding the durability of that collaboration, Blackburn noted:

Even in the current economic downturn, the university recently announced plans to develop a new biotechnical business incubator in a core downtown area while our city government is moving forward to redevelop a nearby 16-acre former utility site into a high-tech innovation zone, to ensure the future growth and success of biotech industries in our community.

Thomas McIntosh, chair-elect of the Gainesville Area Chamber of Commerce, reported that "in the midst of a recession," UF's Shands Medical Center opened an $80 million cancer facility and that the university "managed to get through the state budget without too severe a cut."

Echoing Blackburn, McIntosh said the local chamber is strengthening its links to the campus community through an "Innovation Gainesville" initiative aimed at building a high-tech, high-wage employment base.

"We're using the guidelines of the (state's) Qualified Target Industries program to attract jobs that pay at least 120 percent of the median wage," he said.


Contact Kenric Ward at or at (772) 801-5341.

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