Ask a new Florida governor what his priorities are and, in normal times, you'll get a list about improving the economy and the environment plus boosting education and health care. But these are not normal times. Florida's recession is deeper and longer than any downturn in many decades. And our new state leader, Rick Scott, is a different kind of governor.
As he heads into his first encounter with the full Legislature, Scott's priorities seem strikingly simple:
• Implement accountability budgeting.
• Streamline state government.
• Create an environment for job creation.
Those three priorities are listed on his website. Successfully campaigning for governor with the singular messages of "Jobs, jobs, jobs" and "Let's get to work," Scott now must honor his mantra. With a state Legislature focused on balancing Florida's in-the-red budget, Scott must figure out how to make jobs lemonade out of budget lemons.
He's off to a rough start. Scott wants to cut just under 13,000 state government jobs over the next two years — shrinking the state payroll from the current 126,765 jobs to 113,977.
That certainly helps the budget. It does not help job creation.
Scott's promise to create 700,000 jobs in seven years (note the assumption of re-election) sounds lofty. And it is, if the Florida economy has trouble reducing the state jobless rate hovering near 12 percent. Five years ago, unemployment was running at just 3.3 percent.
But 700,000 new jobs is not such a sky-high target. We've seen higher numbers. Since 2007, for example, Florida's lost more than 876,000 jobs.
Keep this in mind, too. We're on an upswing, uneven and modest though it seems. The state's starting to show job growth on its own and is expected to generate 1 million jobs as the recession recedes. So even if Scott and the Legislature pull a Rip Van Winkle and sleep for a couple of years, the state would be adding jobs without any Tallahassee mojo. Scott says his 700,000 jobs are in addition to whatever the improving economy generates, though how Floridians will know one from another is unclear.
The question is: Given his financial constraints, what can Scott do to honor his priorities? How can he really improve the state's "environment" for job creation? Here are a five suggestions for the "jobs, jobs, jobs" governor.
1. Become Florida's top jobs salesman. There's a huge difference between being Florida's best carnival barker and Florida's best jobs salesman. The barker stands before the entrance to a show and solicits customers with a loud sales spiel. A good salesman explains why relocating or doing business in Florida is the best possible strategy for a company wanting to grow and become stronger.
So far, in Scott's term as governor we're seeing more barker than salesman. When California-based Bing Energy said in February it would put its headquarters in Tallahassee (to be close to the Florida State University brains it's been tapping), Scott was quick to mention that his policies were a major factor in bringing the company to Florida. Actually, Bing's relocation was well in the works before Scott took office, though the company, which makes fuel cells, said Scott's promise to end the state corporate income tax sealed the deal. So if Bing delivers on its 244 jobs in the coming years, that leaves 699,756 jobs to go to make Scott's promised 700,000 by 2018.
Scott's value as Florida's salesman can't be overestimated. Done well, the governor as pitchman, especially one that "speaks" the language of business and has run a large corporation, could be formidable. But a governor who just makes a bunch of phone calls to businesses in more expensive states (like Illinois, where the state is drastically raising taxes to close a huge budget gap) and saying "Florida is friendlier than ever and open for business" isn't doing enough. The governor will need a better game plan to target specific companies in specific industries — perhaps with specific incentives — and explicitly show how a Florida expansion or relocation will be both more cost efficient and likely to spur greater growth for the company.
Scott's firing of John Adams as head of Enterprise Florida, the public-private economic development agency for the state, and Scott's revival of the state Commerce Department under proposed chief Gray Swoope only reinforce the need for the governor to serve as the frontman on business recruiting. Some Enterprise Florida insiders say Scott is making calls to encourage specific business recruiting efforts. That's a great sign of a participation level not seen from Gov. Charlie Crist.
Even so, business recruiters say the early betting on Scott is still iffy. Because Scott is an unknown as a politician and his agenda somewhat radical to mainstream businesses, some site selection experts are advising their corporate clients to adopt a wait-and-see attitude on possible Florida expansion. That means Scott will have to work harder to clarify where the Florida economy is heading. As we hear over and over, businesses hate uncertainty. And Florida's economic recovery and the direction of Tallahassee still feel too up in the air.
2. Don't get too hung up on ending the corporate tax. Scott has pledged to bring down the corporate tax rate in Florida to zero. He would lower the corporate income tax from 5.5 percent of profits to 3 percent by January 2012. By January 2018, the tax would disappear entirely.
But would that make a material impact on business behavior? Would companies once reasonably content elsewhere suddenly flock here? They might if Florida's tax rate was 35 percent and Scott took it to zero. But dropping from 5.5 percent to zero over seven years will at best produce a marginal gain. That's helpful but not a game changer.
The trick is, Florida already rates fairly high — No. 14 on Site Selection magazine's list among the 50 states and D.C. — for a more complex measure of "business climate." So the appeal of pitching a corporate tax rate of zero is far less meaningful than if Florida ranked among the worst states for business climate.
3. Don't underestimate quality public education when recruiting new businesses. Low or no corporate taxes may help attract businesses. So does a quality public education system. It tells business managers the state recognizes the need for a competitive, well-trained population of young adults entering the state's work force. Businesses also want to know if they expand to Florida, will their workers feel like they have to shell out extra money for private schools, or do public schools really deliver on a so-called 21st century education?
Scott's two-year budget would shrink overall state spending from $70.3 billion to $63.3 billion in 2012-2013. The cuts were unexpected, raising alarms by many who argue Florida can't raise its jobs bar while cutting education commitments. Florida teachers saw their 2009-10 school year average salaries fall to No. 37 among the 50 states and D.C. Estimates for 2010-11 show them falling to No. 47, says a new national report. That's probably not going to inspire companies elsewhere to pick Florida based on its cutting-edge school graduates and superior work force.
4. Don't just pursue jobs for jobs sake. Try to encourage better jobs in the state, too. Targeting 700,000 Florida jobs in seven years sounds catchy. But I don't see much discussion of the kinds of jobs that are being encouraged in Florida. And I don't see what they pay.
A recent St. Petersburg Times analysis found that the jobs that are being created in Florida these days tend to pay much less than the jobs we are losing. That's a worrisome trend since Florida's average wages already hovered below the national average. The latest job gains will drag the average Florida wage even lower. Should we say Mission Accomplished if Scott does claim 700,000 jobs created in seven years if 350,000 are dishwashers and 350,000 are lawn mowers?
Right now, with the state jobless rate so high, fewer people may care. But in another year or two, Floridians will wonder again: Where are the better-paying jobs? Scott would do well to ensure quality along with quantity job creation.
As University of Florida veteran economist David Denslow recently told AP: "If it winds up at the end of seven years that these policies have created another 350,000 jobs instead of 700,000 — and they're relatively high-quality jobs — then I would applaud."
5. Break the rising perception of making arbitrary economic decisions before all the facts are in. Scott's February call — labeled premature by many, and made before key data could be considered — to cancel the high-speed rail project between Tampa and Orlando may not only end up killing 24,000 jobs. It's leaving the business community uneasy that politics may ignore basic economic analysis on business deals in the state in the process. Scott declined to wait for private sector bids or a revised regional plan to save the high-speed rail project, which may have insulated the state from financial exposure. That has many worried.
It's just as important for Scott to deflect the lobbying push of his tea party fans calling for state government to shrink as it is for the governor to weigh economic decisions only after key information is fully available. If Scott insists on wearing the mantle of a CEO governor, he really should play by the rules of business.
Contact Robert Trigaux at firstname.lastname@example.org.