State economist's economic development ideas clash with Gov. Scott's
While Gov. Rick Scott was in New York recruiting jobs Thursday, the state’s top economist as in Tallahassee telling lawmakers that Florida’s strategy for growing the economy is off-base.
Economist Amy Baker laid out recommendations for economic incentive programs that differ from much of the development strategy that the state has taken. The state should give more support to small businesses and entrepreneurs, she said, and spend less effort attracting businesses in industries that might be drawn to Florida anyway.
“They or a competitor of theirs are likely to come to Florida anyway,” Baker said to the House Economic Affairs Committee. “If they’re likely to come anyway, you’re not really getting the bang for your buck.”
Baker further pointed to the problems with using tax incentives to bring in large companies that have a presence in other states. The state’s return on the investment becomes diluted, as money ends up boosting economies in other states where a company already exists.
Much of the growth in Florida right now, she said, is in start-ups and small businesses, and the state can capitalize on that growth and keep more money in the state by focusing less on bigger firms.
“It’s not bad to be big,” Baker said. “It’s definitely a policy decision for the Legislature to say that’s the element of our economy we want to focus on.”
Much of Baker’s presentation Thursday flies in the face of recent job growth work Scott has championed. Last month, he announced 40 new jobs at the South Florida location of 1st Choice Aerospace, a Kentucky-based company that already had a presence here. Early this year, the governor attracted Wawa, a Pennsylvania chain of convenience stores, to expand in the state.
Scott stands by his economic development record, saying that Florida should continue to put a premium on attracting business from other states and countries.
"Of course, part of that diversification means competing to be the best state in the world for job creation," his spokeswoman, Jackie Schutz, said in a statement. "We can’t afford to have the short-sighted approach that Florida doesn't need to do anything to compete with other states, and even other countries, to create jobs.”
While the 1st Choice Aerospace jobs are expected to earn $66,000 per year on average, the Wawa growth is indicative of a different kind of trend, one Baker said the state should think about avoiding as the economy stabilizes after the Recession.
“As you move to a more normal economic environment, you probably want to start thinking about wages as well,” she said.
Median wages among those who are working — adjusted for inflation — are lower than they were in 2009, at the height of the recession, according to state data.
Schutz said Scott will be pushing to eliminate sales taxes for manufacturers as part of his economic development agenda.
"Manufacturing is a high growth industry that will help diversify Florida’s economy for generations to come," she said.
According to Baker's data, manufacturing jobs in Florida pay an average of $55,517 per year (compared to $62,976 nationally) and make up 4.3 percent of the workforce in the state.