Scott, Sink divided on how to create jobs

TALLAHASSEE — Republican Rick Scott and Democrat Alex Sink are both former business executives duking it out in an increasingly hostile race to be Florida's governor, but they agree on one thing: more jobs are needed.

In television ads and on websites, with promises and slogans, they want Florida voters to know that creating jobs is the No. 1 issue in the Nov. 2 gubernatorial election.

But while the dueling CEOs-turned-politicians agree that Florida needs to revamp economic incentives, provide tax breaks and streamline regulations, they fundamentally disagree on how to do it.

Sink, the former head of Bank of America's Florida operation, spent 25 years in the banking industry before she was elected Florida's chief financial officer in 2006. Her ''Business Plan to Revitalize Our Economy and Put Floridians Back to Work'' proposes to diversify the economy, nurture small businesses and provide access to investment capital.

She proposes no tax increases and pays for the plan through unspecified spending cuts and a reliance on rising tax revenues from an improved economy.

"Economic growth doesn't come from government — it comes from business," states the plan Sink released in March, a month before Scott entered the race. "But good government must help the private sector drive growth. It must create a climate of confidence by getting our own financial house in order and holding the state's politicians accountable for the economic development we create and the direction we're headed."

Scott, the former CEO of Columbia/HCA, the for-profit hospital chain, wants to stimulate the economy with a seven-point plan built around cutting government spending. Called "7-7-7" (referring to seven steps to create 700,000 jobs over seven years), his plan proposes reducing unemployment benefits, restricting lawsuits, eliminating expensive regulations and cutting billions in state spending.

If enacted, his plan promises that "total job growth in Florida will accelerate, the number of new business startups will increase, wages and salaries will grow, and the productivity and vitality of Florida's economy will soar."

His plan also includes no tax increases, relies on tax and spending cuts to stimulate job growth, and pays for it with rising tax revenues spawned by an improved economy.

"Regulatory reform, coupled with budget reductions, will see job generation start — which means more taxes coming into the state," said Donna Arduin, Scott's chief economic adviser who was budget chief for former Gov. Jeb Bush.

All these claims come against a backdrop of the worst economy in recent Florida history. The state's unemployment rate is hovering around 11.5 percent, tax revenues are in tatters from the oil-scarred beaches of the Panhandle to the collapsed real estate markets of South Florida, and the state faces a $6 billion budget deficit that must be closed by next year.

Dominic Calabro, president of Florida TaxWatch, the nonprofit, business-backed tax watchdog group, said there's a lot for voters to like in the two plans. Both Scott and Sink bring the "street smarts'' of an executive who has met a payroll, he said.

But Calabro added that voters could use more details. "They're a good start but you need to get more specific."

Though Scott pledges to create 700,000 jobs in seven years, he admits the number is rounded up from his estimate of 662,000 and calls it "very conservative." After state economists projected the anticipated economic recovery would create 775,000 jobs within the next four years and 1 million in seven years, regardless of who is elected governor, Scott spokeswoman Jen Baker clarified that their job creation projections are on top of that.

Neither Sink nor Scott offers price tags for most of their proposals, and both lack specifics about many of their ideas.

"Rick (Scott) is more: 'Let's ring out the costs,' and Alex (Sink) is, 'Let's create value-added,' " Calabro said. "Rick is probably going to challenge the whole system more, but they're both a great breath of fresh air. They approach it from different attitudes."

Both Scott and Sink would make economic development a focal point of their administration. Scott would name himself the state's "chief economic development officer,'' and he touts that fact because he has created jobs in his business.

Sink, who was chairwoman of TaxWatch's board of directors, developed her plan after consulting with a bipartisan group of consultants: former state budget director Glenn Robertson, former state revenue chief Larry Fuchs, Miami economist Tony Villamil and Miami consultant Rodney Barreto.

She says she brings "turnaround expertise and business know-how to jump-start Florida's economy."

Both candidates propose to spur job development with many of the same ideas but different approaches. Among them:

• Sink proposes cutting red tape by streamlining permitting and regulatory decisions and expediting already-approved economic development projects. Scott would eliminate overlapping state and local economic development agencies and impose a temporary freeze on regulations, then eliminate those that cost businesses more than they benefit the state. Scott also would expedite permits for job-creating businesses.

• Sink would provide tax credits for Florida businesses that export health care, renewable energy, arts and movie production. She would also tap the Florida Retirement System's $130 billion in assets by using $2 billion to make investments in high-tech companies that create jobs in Florida. Scott would also invest in high-tech companies by expanding the Innovation Fund, using excess revenues he expects to be generated by the economy in his second year.

• Both candidates want to increase the ties between the state's colleges and universities, and the state's economic development efforts. Scott wants to create technology clusters to create 60,000 new jobs. Sink wants to accelerate the pace at which products developed at universities can be sold on commercial markets and target degrees to employers.

But it is in the area of taxes and budgets where the two have fundamental differences.

Scott wants to roll back state and local government spending to 2004 levels — until it equals 20 percent of the state's total economic activity or gross state product.

Arduin, Scott's economic adviser, said Scott's plan would require lawmakers to cut at least $6 billion from the state's $70 billion budget.

Scott would also eliminate the 5.5 percent business income tax over seven years and proposes a $1.4 billion reduction in statewide property taxes that pay for education, replacing the money with improved collections of state sales taxes.

Sink proposes no wholesale tax cuts but prefers targeted cuts, such as tax credits for the research and development of new products and incentives for business that create jobs. She has identified $700 million in immediate spending cuts to pay for new initiatives, and plans to review all state government spending for more. Sink doesn't have a prediction for how many jobs she'll create.

Sink offers the most specifics in the area of helping small business and creating tax incentives for job growth — from deferring corporate income taxes to giving homegrown Florida companies a competitive advantage in state contracts.

Scott criticizes Sink's targeted cuts as giving some industries an unfair advantage over others, and says many parts of the plan, such as creating a small business ombudsman, expand government.

The differences between his approach and Sink's is clear, he said. "My background is, I put my money up. I took the risk. I stood up for what I believed in in starting businesses. … She clearly believes in higher taxes. She clearly believes in Obamacare. She clearly supported the stimulus, and the stimulus has not created one private sector job."

Sink called Scott's plan a "series of tired, recycled ideas that have failed in the past." She said she brings a "reputation for integrity and honesty'' and a record of working "to help small businesses achieve their dreams, making my bank a leader in small business lending."

Alan Stonecipher of the Florida Center for Fiscal and Economic Policy, a nonprofit, left-leaning think tank in Tallahassee, disagrees with Scott's approach. He notes that Florida is already a low-tax state — ranked 46th in the percentage of personal income that goes to state taxes. "The idea that we could somehow relieve ourselves even further and magically produce jobs is very far-fetched," he said.

Calabro of TaxWatch also warns the candidates to tread carefully in their economic reforms.

"I don't think you can tax your way out of this or cut your way out," he said. And if the state goes too far in either direction, it could backfire. "We spend all this money trying to attract somebody to come here, but we have to be careful we don't lose what we have."

Mary Ellen Klas can be reached at meklas@miamiherald.com.