Gov. Scott in Tampa to trumpet tax cut and big drop in state jobless rate

The governor visits Tampa Bay, where the rate fell to 6.7%, to trumpet a tax break for manufacturing.
Published May 17 2013
Updated May 18 2013

TAMPA — Gov. Rick Scott was all smiles during a stop in Tampa on Friday morning, his only complication being which of two economic victories deserved the bigger celebration: a big drop in Florida's unemployment rate or a sales tax cut for manufacturers.

In tandem with signing the tax cut bill, Scott touted the state's jobs report, which included an unemployment rate of 7.2 percent, an almost five-year low. Among the other highlights: Florida added 9,000 construction jobs from March to April, more than any other state and a sharp reversal from the years it led the country in shedding construction workers.

In just two months, Florida's jobless rate has now retracted more than a half-percentage point, and it's down substantially from 8.9 percent a year ago. It's the second straight month that Florida's rate has been lower than the national rate, which stood at 7.5 percent. The state added 17,000 jobs from March to April, and 119,000 jobs from April 2012.

In the Tampa Bay area, the unemployment rate fell from 6.9 percent to 6.7 percent, the lowest point since June 2008. The area has added 35,400 jobs since April of last year, tops in the state.

The unemployment rate fell in all five Tampa Bay counties. Hernando, one of the state's hardest hit counties during the recession, had the biggest decrease among local counties, tumbling from 8.5 percent to 8.1 percent. For the first time since the depths of the Great Recession, no Florida county was suffering double-digit unemployment as Hendry County inched down to 9.9 percent.

Among the mostly positive numbers released Friday, one trouble spot remained: Florida's labor force contracted again. Over the past month, the pool of Floridians either in a job or looking for work fell by 1,000 even though the state's 16-and-older civilian population grew by 17,000. The nagging fear is that many of those who dropped out of the labor force are discouraged workers who have temporarily stopped looking. Once they start job hunting again, that could drive unemployment back up.

During his Tampa stopover, Scott would not directly discuss strategies the state could pursue to draw discouraged jobless back into the workforce. The main focus, he said, is to keep adding jobs.

"What we have to continue to do … is make sure there are plenty of jobs in the state," he said. "If you go across the state now, you hear about all the job opportunities. Right now we have about 255,000 job opportunities in the state. So we're making progress getting people back to work. We're making progress every day."

Around the state, leisure and hospitality (plus 34,400 jobs), private education and health services (plus 19,700), construction (plus 15,500), and business and professional services (plus 14,300) have all added jobs since last April. Government (minus 8,900 jobs) and manufacturing (minus 4,000) were the only major areas still losing jobs year over year.

The struggle on the manufacturing front wasn't lost on a couple of dozen politicians and economic development leaders joining Scott for Friday's tax cut ceremony in Tampa.

Inside Heat Pipe Technology's cavernous manufacturing floor, Scott signed one of his top priorities of the recent legislative session: a bill that exempted sales taxes for manufacturing equipment. The law's effect on reducing local sales tax revenues is still being debated, but economic development leaders praised it as putting Florida on firmer footing to compete for manufacturing jobs with other states.

Describing himself as the only manufacturer in the Florida Senate, printing company owner and Republican Sen. Jack Latvala, R-Clearwater, said manufacturing has been a missing piece of Florida's economic recovery. With the help of the sales tax exemption, "we're going to be able to bring back manufacturing in north Pinellas County," Latvala said.

Mark Wilson, president of the Florida Chamber of Commerce, likewise said the tax break over the long term will be "a launching pad" for job creation.

Case in point: Heat Pipe Technology. The maker of humidifier heat pipes, which moved its headquarters from Gainesville to Tampa last year, now has about 20 workers and expects to grow to 25 by year-end and up to 100 within five years. Ken Jurgensmeyer, HPT's director of engineering and operations, said his company has already invested about $1 million in equipment.

The tax cut will let HPT invest even more, freeing up funds to spend on other priorities like worker safety and training, Jurgensmeyer said. "I wish it had been around before," he added.

Some opponents may file a lawsuit to stop the bill on the grounds it did not pass by a supermajority as required for any legislation that could put a significant dent in local revenue. However, legislative staff analysts who initially said a supermajority was necessary have reversed themselves on the issue.

For 31 months in a row, Florida's unemployment rate has either dropped or stayed unchanged. Despite that streak, it would have to fall a bit further, comfortably below 6 percent, before reaching a level consistent with a healthy economy.

About 680,000 Floridians out of a labor force of 9.4 million remained out of work as of April.

Jeff Harrington can be reached at [email protected] or (727) 893-8242.