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Gov. Scott's efforts to raid out-of-state jobs ticks off other governors

In a letter inviting Connecticut business owners to come visit the Sunshine State, Florida Gov. Rick Scott says Connecticut is “one of the worst tax climates for business in the country.”
Published Jun. 9, 2013

TALLAHASSEE — Gov. Rick Scott's latest tactic to attract jobs is to brag about Florida as much as possible while criticizing other states — whose governors don't appreciate it one bit.

What Scott considers savvy salesmanship, other governors see as a crass publicity stunt with partisan overtones.

Scott's "One-Way Ticket to Florida" letter-writing campaign is targeting corporate executives in five Democratic states with high concentrations of high-paying manufacturing jobs. The letter has carefully cut-and-pasted comparisons that show Florida in a favorable light.

"While Florida's economic formula is working, we know that Connecticut's formula of more taxing and more spending isn't working," Scott wrote to dozens of Connecticut CEOs. Citing data from the Tax Foundation, a conservative-leaning think tank, Scott wrote that Connecticut "is among the worst tax climates for business in the country."

Gov. Dannel Malloy's commissioner of economic development, Catherine Smith, described some executives as "shocked" by Scott's blunt criticism of life in Connecticut.

"They thought it was very blatant. They were a little bit offended by it," Smith said. "You get a letter like that, you probably put it in the garbage can."

Despite its small size and higher taxes than Florida, Connecticut is home to hundreds of well-known brands in a variety of industries such as Duracell, ESPN, Ethan Allen, Priceline.com, Sikorsky and UnitedHealthcare. The state's assets include a skilled workforce and proximity to New York and Boston.

All is not rosy: A survey of Connecticut business owners by the New England consulting firm BlumShapiro last year found that 69 percent had a negative view of the state as a place to run a business, with one third saying they might move or expand to another state within the next five years.

Scott didn't always look down on Connecticut. He used to live in Stamford, an upscale New York City suburb, where he ran an investment firm before moving to Naples in 2003.

Scott's pitch is aimed at five states, including California, Illinois, Maryland and Minnesota, and they weren't chosen by accident. All five have Democratic governors.

Scott, who's seeking re-election next year and battling an unpopular image with Florida voters, would make powerful enemies if he tried to raid jobs from states run by fellow Republicans.

He counts among Florida's virtues the lack of a personal income tax, great weather and its status as a "right to work" state.

"My job is to promote the state," Scott said. "One thing that I think we all ought to do as Floridians is, we ought to brag more."

Scott's biggest target, California, has yielded results. He will be in Boca Raton on Monday to tout the decision by GardaWorld, a worldwide security firm, to shift its U.S. headquarters and about 500 employees to Florida from Pasadena, Calif.

But when Scott faulted Illinois for its "formula of more taxing and more spending," Gov. Pat Quinn fired back and said Scott got his facts wrong.

"Poaching is not an economic development strategy," said Sandra Jones of the Illinois Department of Commerce. "These publicity stunts don't work. Businesses are choosing Illinois all the time."

Illinois cited a study of business tax burdens released last month by the Anderson Economic Group of Michigan, which rated Florida as having the seventh-highest business tax burden in the United States at 13.4 percent. Illinois ranked 20th at 9.6 percent.

The study combined state and local taxes and fees paid by businesses as a share of its pre-tax operating margin. Florida ranked low because its property taxes are higher than in most other states, the study found (property tax rates are set by cities and counties, not by the governor).

Scott's letter to CEOs across Minnesota highlighted that state's recent decision to raise its income tax. But unlike other letters, he did not mention unemployment. While Florida's jobless rate has steadily fallen on Scott's watch, to 7.2 percent, Minnesota's rate of 5.3 percent is even lower.

"Minnesota is an exceptional place to live and work and is consistently recognized as one of the best places to do business in the United States," said Katharine Tinucci, a spokeswoman for Gov. Mark Dayton, noting the state's multitude of Fortune 500 companies. "We don't need to rely on gimmicks or media stunts to encourage economic development in Minnesota."

When Scott criticized Maryland for tax and fee increases that he said led to business losses, the state fired back on a subject very sensitive to Scott: tuition.

The College Board ranked Maryland Gov. Martin O'Malley as the most effective in holding down college tuition, and Education Week's "Quality Counts" survey rated Maryland's schools as the nation's best (Florida ranks sixth).

Scott's come-to-Florida sales pitch is not an original idea. It's an expanded version of a tactic Texas Gov. Rick Perry employed last year, when Texas bought air time on California radio stations in an attempt to lure companies to that state.

To bolster his case, Scott borrows from the conservative American Legislative Exchange Council, a pro-business think tank, whose ALEC-Laffer State Economic Competitiveness Index rated Florida ninth best for business among the 50 states.

So far, the governor's office has not identified a single case of a company headed to Florida because of Scott's outreach, not even GardaWorld. But more letters will extol the virtues of living in the Sunshine State, especially low taxes, in comparison to its northern neighbors.

"All these places seem like they constantly want to raise taxes, raise taxes, raise taxes," Scott said. "That's great for us."

Times researcher Natalie Watson contributed to this report. Contact Steve Bousquet at bousquet@tampabay.com or (850) 224-7263.

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