Florida Paid Down Half Its Debt. Washington Should Take Notes.

Commentary

The U.S. federal government debt is $40.3 trillion which, is more than $115,000 for every man, woman, and child in America. And it grows by about $5 billion a day. The fiscal year that just ended required another $2 trillion in borrowing. Interest is now the second-biggest item in the federal budget, behind only Social Security, and we spend more on interest than on national defense. As anyone who has carried a credit card balance knows, interest doesn’t buy you anything. You just pay and pay, and the balance barely moves.

I study how companies and governments are run. The ones that pay down debt in good times have options when bad times come. Florida, where I’m lucky to live and work, has taken that to heart.

Florida cut its debt in half. In 2018, the year before Gov. Ron DeSantis took office, the state’s tax-supported debt (the bonds Florida repays from tax revenue) stood at $17.5 billion. By 2026, it had fallen to $8.7 billion, even as the state’s population grew by more than 10 percent.

Florida did it the way families pay off a mortgage early: by paying extra toward the principal. The state has retired bonds ahead of schedule, and Mr. DeSantis says that has already saved taxpayers $1 billion to $2 billion in interest. In 2025, the Legislature wrote the habit into law, setting aside $250 million every year for early payoff.

Florida has also cut state spending four years in a row. It has more than 1,300 fewer state positions than in 2019. The rainy-day fund, the state’s emergency savings account, is full to its legal limit of about $5 billion. All three major credit agencies rate Florida AAA, the government version of a perfect credit score.

Most importantly, since 2013, Florida has paid the full amount its pension system needs every year. Promises to teachers, deputies, and other public workers are funded as they are earned, instead of being left to our children. Mr. DeSantis was right when he said at his final budget signing that Florida is “leaving it better than we found it.”

Pensions are where most states hide their real debt: $832 billion in unfunded pension promises nationwide. The watchdog group Truth in Accounting measures this every year by adding up the money a state has to pay its bills, subtracting everything it owes, including pensions, and dividing by the number of taxpayers. In its latest report, Florida had $2,900 left over per taxpayer. Ten years ago, Florida was $1,600 in the hole.

Now compare the states many Floridians fled. IRS data show newcomers brought $20.6 billion more income into Florida than departing residents took out. According to Truth in Accounting, each New Jersey and Connecticut taxpayer’s share of unpaid state bills is $44,500. That’s a $47,400 swing between a taxpayer in Trenton and one in Tallahassee. Illinois taxpayers are on the hook for $38,800 each, Massachusetts taxpayers $24,900, and California taxpayers $21,800. Illinois has just 43 cents for every pension dollar it promised, and Illinois and California had not even released audited 2024 books when the report came out. The national standard is 180 days after the fiscal year ends. Illinois took 769 days to publish its 2023 books. A public company that sat on its numbers that long could be delisted.

To be fair, Florida had help. Federal pandemic money padded every state’s books, including Florida’s. If federal grants fall back to pre-pandemic levels, Florida could lose $11.1 billion, about 8 percent of state spending. A Washington that is over $40 trillion in debt is not a reliable partner.

That is why this election matters. On Nov. 3, Floridians choose a new governor, and the Legislature’s long-range financial outlook already shows what’s ahead: surpluses for two years, then a deficit of just over $1 billion in 2029–30, in the middle of the next governor’s term. Health insurance for state workers is growing about 8.5 percent a year. By 2030, more than a quarter of Floridians will be 65 or older. And with deaths now outnumbering births, Florida’s growth depends on people continuing to move to the state.

Whoever wins should commit to three things.

First, keep paying down debt early. The $250 million a year in state law should be a floor, not a ceiling.

Second, don’t turn a good year into a permanent bill. A surplus is one-time money. Spending it on new yearly programs is like taking on a bigger car payment because you got a holiday bonus.

Third, pay the full pension bill every year, in both good and bad markets. New Jersey and Illinois show where the other road leads.

Florida proved it can be done. Washington and other states should follow its lead. Florida’s next governor must not squander it.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.