Editor’s note: This two-part series features national and local leaders of Valley Bank in a discussion with the Catalyst about economic and social trends that have emerged from the Covid-19 pandemic. Part 1 will focus on national and state perspectives, while Part 2 will take a look at the role banks like Valley have played in keeping local businesses afloat during the crisis.
As the head of a community bank that operates only in New York, New Jersey, Alabama and Florida, Ira Robbins, president and CEO of Valley Bank, has had a front-row seat to the pandemic-driven economic upheaval that’s led to an exodus of people and business from densely populated, expensive, high-tax northeast states to the sunny, open-air climes of Florida and particularly Tampa Bay, where cost of living and taxes are comparatively low.
For starters, he said the Covid-19 crisis has led a huge swath of the U.S. population to take stock of and reevaluate their personal and professional lives, and what’s truly important for their future and the future of their families.
“Covid,” Robbins said, “has become the intersection between your professional purpose and your personal ‘why?’ As wonderful as Florida is, you cannot replace Manhattan, right? It has a unique cultural environment. The atmosphere is something that can’t get replicated overnight. That said, there is a significant transition of people who’ve realized they don’t need Manhattan and what it offers any more. And I think they’re looking for a different experience.”
Robbins believes that even after the Covid-19 crisis becomes a distant memory, there’s no going back to the way things were in terms of the New York/New Jersey area’s gravitational pull as a place to build a business, climb the corporate ladder and educate kids. The genie is out of the bottle — and instead of blue skin, he’s sporting a Florida tan.
The southern migration, Robbins said, has only become more noticeable and pronounced since 2014, when Valley entered the Tampa Bay market with its acquisition of Clearwater-based USAmeriBank. Back then, the inflow was more akin to a steady trickle and less a raging flood.
“Since 2014,” he said, “we’ve read in the press and seen different stories, on an annual basis, saying, ‘This person’s moving, that person’s moving,’ but this time, I think it’s definitely different. Enrollment in schools is the telling factor to me. Some of the charter schools that we have here in our Florida footprint, the enrollment wait list has doubled, tripled, even in some cases, quadrupled. I don’t think you’d enroll kids in school if [a move] is going to be temporary. And conversely, you look at the wait lists at some prestigious private schools in New York, and they’re not waitlisted anymore.”
Robbins’ assertions are backed up by hard numbers — hard truths, if you’re a diehard New Yorker. According to U.S. Census Bureau data released in December, more than 126,000 people fled the Empire State between July 2019 and July 2020. Over the past decade, the state’s population declined by 1.4 million — and guess where more than one-fifth of those people went? That’s right — Florida, which in 2014 overtook New York as the nation’s third-most populous state.
However, Robbins said it’s important that Florida’s political leadership not lose sight of the qualities that have made it such an attractive relocation option for workers, families and businesses in recent years. Continuing the diversification of the state’s economy, keeping taxes low and providing more opportunities and resources for entrepreneurs will be key to maintaining the momentum that’s come from the pandemic’s grip on other parts of the nation.
“We have an opportunity to provide relationship banking to a whole new group of individuals that are coming down here,” he said. “They’re looking to start businesses, and I think that’s what Florida wants, because historically, the people who have migrated to Florida have been of an age where they aren’t necessarily starting businesses. They aren’t so entrepreneurial. They’re not using the systems to a great degree, so they’re not a huge drain on the economy, but they’re not producing. But what you’re seeing now is small business owners begin to move down. Here are people who have the capacity to start businesses, and that’s going to exponentially enhance growth in the Florida footprint, unfortunately to New York and New Jersey’s detriment.”
Robbins also called on the leadership of New York and New Jersey to not only rethink their stances on taxes, but to reconsider, in the wake of everything we’ve learned from Covid-19, how they conceive of their source of revenue — the taxpayers — if they want to compete with Florida in the years to come after the pandemic.
“There’s going to be a shift as to how people behave,” he said, “and I think that’s the thing that Jersey and New York have gotten wrong. They sit there and look at it from an insulated perspective: ‘How do we think about the corporate tax structure in New York and New Jersey? How do we think about the income tax structure in New York and New Jersey?’ They look at it in isolation. They don’t look at it in terms of people having the ability to move.”