Florida Capital Bureau Chief – March 07, 2011
Florida is a right-to-work state with endless summers, low labor costs, no income tax and one of the cheapest and most productive public work forces in the nation.
But with more than 1 million Floridians out of work, a jobless rate higher than the national average and an unemployment compensation trust fund that has long gone bust, Florida has to be even more business-friendly.
That’s the argument of Gov. Rick Scott, a Republican conservative who came straight from the corporate world and now sees himself as Florida’s CEO. The governor seeks about $300 million this coming year and $500 million in 2012-13 for a fund to attract businesses to the state.
Scott’s plan for creating 700,000 jobs in seven years, on top of the roughly 1 million jobs that state economists say will come from natural population growth over the same period, includes a mix of radical budget cuts, eliminating regulation, lowering taxes and luring businesses with taxpayer-funded incentives.
“What he is doing is the Nirvana of economic development and the dream of the business community,” said Associated Industries of Florida President Barney Bishop.
Scott’s economic advisers say reducing regulations and limiting lawsuits through tort reform will create 237,699 jobs. Another 364,214 jobs will come through tax and budget cuts. And 60,000 jobs will be created through economic-development initiatives, Scott’s experts say.
Florida State University economist Randall Holcombe can’t vouch for the specific numbers, but thinks Scott is on the right track.
“I’ve read his plan and I would have to say he’s doing the right things,” Holcombe said.
Scott proposes reducing Florida’s corporate-income tax to 3 percent this year on the way to doing away with it completely. Recent studies suggest that at the current 5.5 percent, Florida’s corporate income-tax rate is among the lowest in the nation. Some 32 states charge a flat rate and only South Carolina, Michigan, Utah and Colorado are lower.
Scott’s plan for up to $600 million in tax breaks and economic incentives may not be such a good idea, says Holcombe.
“That money is coming from somewhere, and those taxes cost jobs too, they just don’t get noticed,” Holcombe said.