The next Governor talks to 850 readers

No matter who wins the gubernatorial election, reviving Florida's unsteady economy will be the top priority

Economic Revivor-in-Chief Repairing Florida’s economy will be ‘Job One’ for Florida’s new governor, no matter who gets elected By Linda Kleindienst Originally published in the Oct/Nov 2010 issue of 850 Magazine

Florida’s next governor may party on election night, but the next four years will be a far cry from a cakewalk.

No matter who wins on Nov. 2 — Rick Scott or Alex Sink — the new governor will inherit a state with double digit unemployment and facing a multi-billion dollar deficit in the next state budget.

Perhaps then it’s no surprise that both candidates, each coming from a very successful business background, have focused much of their attention and rhetoric on one issue: reviving Florida’s economy.

“This campaign there has been a lot of discussion about where we need to go as a state and how to get there,” said Dominic Calabro, president of Florida TaxWatch, a non-partisan government-spending watchdog and research organization. “Look at what both of these candidates have done. There is an incredibly greater emphasis on results and performance.”

Sink and Scott have each had to meet a payroll while managing thousands of employees and billions of dollars in assets. They have learned how to balance profitability and talent and run a successful enterprise. And both want to help create new jobs.

Republican Rick Scott is a former health care executive who built Columbia/HCA from the ground up with partner Richard Rainwater in the late 1980s. He went from running a chain of donut shops in college to a man in his early 40s running more than 200 hospitals that employed more than 150,000 people. His personal wealth: more than a quarter of a billion dollars. Now he wants to create 700,000 new jobs over the next seven years.

“I have a plan to provide a business approach to politics by keeping taxes low, limiting job killing regulations and getting government out of the way of small business so they can do what they do best: create jobs,” Scott said.

Scott, who beat Attorney General Bill McCollum in the GOP primary, has been dogged by questions about his private sector background, in particular about the investigation of Columbia/HCA for Medicare and Medicaid fraud. The company ultimately paid more than $1.7 billion to settle civil suits and fines. Scott was never charged with wrongdoing and resigned. In a debate during the primary, he said, “We should have had more verification … that’s a lesson I’ll bring to the table. I’ll take responsibility for things that go wrong.”

Democrat Alex Sink was a banking executive for 26 years, becoming the head of Bank of America’s Florida operations, where she managed $40 billion in customer deposits and supervised more than 9,000 employees in 800 branches. She turned to politics in 2006, winning election to the Cabinet post of Chief Financial Officer. Throughout her business career she was active in the Council of 100, the Florida Chamber of Commerce and Florida TaxWatch. As CFO, the state’s financial watchdog, she oversees approximately 2,000 employees and an annual budget of $200 million.

“Florida can be managed more effectively and efficiently with a common sense business plan,” her website states. “With a business executive behind the governor’s desk, Florida will have a no-nonsense, visionary leader who understands how to work with Florida’s small businesses, entrepreneurs and working families to create jobs and build a stronger foundation for the 21st century.”

No matter the winner, Sink and Scott’s business acumen is likely to stand them in good stead when trying to figure out where to lead the state. Each has emphasized the need for economic development programs that will encourage the expansion of existing businesses while bringing new ones to the state. Scott wants to abolish the corporate income tax over the next seven years, saying the freed-up money will create new jobs; Sink wants to provide more corporate tax credits for businesses that quickly produce new jobs. Both want to tap into the state’s universities to help spur on economic development, with Scott promoting the need to develop technology clusters and Sink calling for faster commercialization of products developed by university researchers.

“With respect to the business pedigree of both candidates, it is outstanding for the business community,” said Barney Bishop, president and CEO of Associated Industries of Florida (AIF), a major business lobby. “What we need first and foremost is somebody who the business community and citizens see as the chief economic development officer of Florida. Both promise to do that.”

While AIF and the Florida Chamber of Commerce have endorsed Scott, both point to the pro-business stances of each candidate — including a promise to streamline state business regulation and not call for new taxes — as a plus for their members.

“No matter what happens in November, we’re guaranteed to have someone coming from the private sector who knows the role government can play in trying to create jobs,” said Mark Wilson, president and CEO of the Florida Chamber of Commerce. “We still have more than 1 million people sitting at home wanting a job. I think people will be ultra focused, not just on the pro-jobs rhetoric, but the details on how we’re going to create jobs.”

TaxWatch has been advising both campaigns and Calabro said each candidate would provide the state with an opportunity to grow through a renewed emphasis on economic development.

“Politicians follow public mood and business leaders lead,” he said. “Florida is in great, great need of leadership.”

RICK SCOTT

Hometown: Naples, Fla.

Age: 57

Born: Dec. 1, 1952, Bloomington, Ill.

Married: Ann

Children: Jordan, Allison

Military Service: U.S. Navy

Higher Education: University of Missouri-Kansas City, Southern Methodist University (law degree)

Occupation: Health care executive, investor

Eliminate Florida’s corporate income tax Reduce the 5.5 percent tax on businesses over a seven-year period, saving businesses more than $1 billion. (A 2.5 percent reduction in the first year would amount to about $600 million.)

Reduce school property taxes Cut by $1.4 billion the state portion of ad valorem taxes levied on home and business owners to support public school operations. (The reduction would amount to about $1 per $1,000 of assessed valuation.) The lost money would be replaced by improving the state’s method of collecting sales taxes.

7-7-7 Seven steps to creating 700,000 jobs in seven years. This plan is primarily centered on cutting government spending and freeing up billions in tax dollars to help generate new jobs. It also includes regulatory reform, primarily eliminating some of the regulations that cost businesses big bucks and expediting permits for job-creating businesses.

Lower costs Reducing unemployment benefits and lowering worker compensation costs by 35 percent would save businesses billions of dollars.

850: What are your economic development goals for Florida — and specifically Northwest Florida?
RS: My economic development goal for Florida is to make it the No. 1 state in the country for job creation and I will accomplish that through the implementation of my 7-7-7 economic plan — seven steps to 700,000 jobs in 7 years. By reducing regulation, cutting state spending, shrinking state government and eliminating the business tax we will make Florida the obvious choice for businesses looking to relocate and provide an environment that encourages businesses already based in Florida to grow and expand. A strong and growing workforce helps all Floridians.

850: Some regions of the state have begun to diversify their economy, but Northwest Florida is still reliant on tourism. What would you do to help the region diversify?
RS: The best thing that government can do to help an economy diversify is create an environment that is attractive to a wider range of businesses. By implementing my 7-7-7 plan, Northwest Florida won’t only be attractive to tourists, it will also be an attractive place to move or start a business. Furthermore, as part of my economic plan we will maximize the intellectual capital we have in Northwest Florida by investing in university research and building business incubators that leverage that research and the region’s resources.

850: Are there any particular industries that you think Florida, especially Northwest Florida, should recruit?
RS: I do believe that it makes sense to leverage the military presence and technical expertise in Northwest Florida to attract high tech industries to the Panhandle. As governor, I will nurture new cutting-edge technology clusters — such as the biotechnology cluster in Orlando that, by conservative figures, creates over $7 in economic returns from every $1 invested — a 7:1 return on investment (ROI). I also envision maximizing the impact from university research on the economy by ensuring that each Florida university — and the research conducted by our universities — are connected to the state’s economic development process.

850: Should state government be proactive in helping the Gulf Coast’s tourism industry recover from the after effects of the Deepwater Horizon spill? If so, what would you do?
RS: The state government should do everything within its power to make sure that BP is held accountable for the oil spill. As governor, I will work with the affected communities to ensure they are receiving what they are owed from BP and to let people across the world know that Florida’s beaches are open for business.

850: What is your stand on oil drilling off Florida’s coast?
RS: Energy independence is not just critical to our economic security, it also is crucial to our national security. We must stop being dependent on other countries for oil. We need to build more nuclear plants, invest in alternative fuels and drill off shore in an environmentally sound way while ensuring Florida’s beaches are protected. What has happened in the Gulf is a travesty, and in my opinion the result of ineffective government oversight and a lack of preparedness. However, we can’t let this disaster cause us to make kneejerk decisions regarding the future of our energy supply. I think it is imperative we understand what went wrong with the Deepwater Horizon disaster and then we can focus on energy independence utilizing all means possible in a deliberate and safe manner.

850: Business leaders say Florida’s government doesn’t offer enough tax incentives to attract new business and retain existing business. Do you believe in incentives and would you enhance the current incentives?
RS: I believe that the best business incentive is a business friendly environment, and that is what we will create by implementing my 7-7-7 plan, which includes reducing regulation and taxes in order to attract all businesses to Florida. Tax incentives tend to pick business winners and losers. I prefer to incentivize all businesses to come to Florida by making it the most business friendly state in the country.

850: Would you propose any changes in the current corporate tax structure?
RS: Yes, as part of my 7-7-7 plan I will completely phase out the business tax over seven years.

850: Many local businesses, especially retailers, feel they are at a disadvantage because the state does not adequately enforce collection of sales taxes on Internet purchases made by residents. Do you support the Streamlined Sales and Use Tax Agreement or should Florida be more aggressive in its enforcement efforts?
RS: While I support lower taxes, I will support efforts to enforce the collection of taxes we know are owed. I am not convinced the streamlined-tax project will help Florida since states that impose an income tax may not want to be as aggressive in their sales-tax provisions as Florida is. I’m also not comfortable giving the crafting of Florida tax policy to an interstate commission.

850: What are your views on solar and other sustainable energy production?
RS: I am in favor of diversifying our energy supply and believe that with Florida being the sunshine state we should attract the businesses pioneering the technology to move their operations here.

850: How important is Florida’s higher education system in attracting new high wage jobs to the state – and what improvements would you make to the system?
RS: Our higher education system must be a pillar of our economic development model in Florida and as step 5 of my 7-7-7 plan outlines, I will focus on investing in university research, laboratories and business incubators and strive to maximize the impact from university research. By leveraging the research strengths of our state’s universities we can create jobs and retain our talented graduates.

850: Retirees have always been a job-creating, clean industry that is good for Florida’s economy. But Florida is losing market share of retirees to other states that can compete on home prices and offer better services. What should the state do to help local communities do a better job at attracting Boomer retirees?
RS: I believe that the Boomer retirees look for the same things other people look for when choosing a place to live; they want their community to be safe, clean, prosperous and accommodating. All of those attributes are indicative of a community with a vibrant economy and plenty of jobs. We must also remain a no-income tax state.

850: Northwest Florida’s transportation corridors are getting overloaded, causing a problem during the summer tourist season and for hurricane evacuation. Do you have any specific plans to address the traffic gridlock?
RS: I believe that providing adequate transportation corridors is a core function of government and will support the creation of additional roadways when there is a demonstrated need. In order to fund infrastructure improvements and expansions I will work with the governors of other donor states to maximize our return on the transportation taxes that our residents pay. We can no longer afford to send our gas taxes to Washington, D.C., and only receive a fraction of that money back for our own infrastructure needs.

ALEX SINK

Hometown: Tampa, Fla.

Age: 62

Born: June 5, 1948, Mt. Airy, N.C.

Married: Bill McBride

Children: Bert, Lexi

Higher Education: Wake Forest University

Occupation: Banker, Chief Financial Officer of Florida

Tie tax incentives to job creation Give corporate income tax credit to businesses planning to create up to 20 new jobs based in Florida over a three-year period. Give Florida companies a competitive edge in winning state contracts.

Tax credits for research and development An example of Sink’s plan is a small tech company with $1,000,000 in revenue that has $200,000 in net income and spends $70,000 on research. With a 9 percent tax credit, similar to what many other states provide, the company could save $6,300 on its state corporate tax, a more than 50 percent reduction in what it currently pays.

High-tech investment $2 billion of the state’s $130 billion pension fund assets would be used to invest in areas like life sciences, clean energy and aerospace/aviation.

Energy finance districts Already allowed in 14 states, EFDs provide residential, commercial and industrial loans to retrofit properties with energy-efficient systems. Loans are repaid through riders on the owner’s property tax bill. According to the Lawrence Berkeley National Laboratory, the demand for new products and installation could create 22,000 Florida jobs over 10 years.

850: What are your economic development goals for Florida — and specifically Northwest Florida?
AS: My short-term economic goal is to revive our economy and create jobs now. To achieve this goal I have proposed tax incentives for small business to start hiring Floridians, as our small business owners are the life-blood of Florida’s economy. In the long term, we must remake our economy, including diversifying Northwest Florida’s economy and bringing in more stable and high-paying industries. We must invest in Florida businesses, particularly high-growth startups, and support the innovative industries of tomorrow. For example, by providing the right incentives and focus, Florida can attract industries like homeland security and defense and renewable energy that will bring the sort of sustainable, well-paying jobs Northwest Florida needs.

850: Some regions of the state have begun to diversify their economy, but Northwest Florida is still reliant on tourism. What would you do to help the region diversify?
AS: I have a detailed business plan that shows how, as governor, I will remake and diversify our economy. In Northwest Florida, especially, the tragic spill in the Gulf of Mexico was an awful reminder of the risks of relying too heavily only on tourism. As governor, I will provide the right investment and incentives to attract innovative, stable industries to Northwest Florida, with plans like an R&D tax credit and better utilizing our colleges and universities. Tourism will always be important, but by encouraging the growth of these new industries, Northwest Florida can build a stable, prosperous economy for the future.

850: Are there any particular industries that you think Florida, especially Northwest Florida, should recruit?
AS: I will work to help Northwest Florida recruit sustainable industries like new and renewable energy, especially biomass, defense contracting and even aerospace. Tourism will be important, but we also must attract the industries of tomorrow to build a strong foundation for the future of our state.

850: Should state government be proactive in helping the Gulf Coast’s tourism industry recover from the aftereffects of the Deepwater Horizon spill? If so, what would you do? a
AS: The citizens of the Gulf Coast can judge my record as a proactive advocate as their CFO. I believe we must do everything we can to help the residents and small-business owners impacted by the spill. Our Panhandle residents are struggling with one of the worst recessions in our state’s history, and this disaster could not have happened at a worse time. As CFO I have focused on bringing relief to our small-business owners, particularly when it comes to navigating the difficult claims process. I have worked to hold BP and the Federal Government accountable for every dime that is owed in claims and have pushed to get this money in their pockets as quickly as possible. I also called for the Legislature to offer specific tax relief and help in the claims process to benefit our small-business owners.

850: What is your stand on oil drilling off Florida’s coast?
AS: I have strongly opposed the near-beach drilling proposals pushed by many in the Florida Legislature, and since the oil spill, I have been calling for a moratorium on any expanded drilling in the Gulf. I was one of the first elected officials to call for a constitutional amendment banning drilling just three to 10 miles off our beaches. The disastrous BP oil spill demonstrated that we must find new energy sources to both protect our natural treasures that are our Gulf Coast beaches and to diversify our economy for the long-term.

850: Business leaders say Florida’s government doesn’t offer enough tax incentives to attract new business and retain existing business. Do you believe in incentives and would you enhance the current incentives?
AS: We must keep taxes low and I have proposed new incentives tied explicitly to job creation in our state. My Business Plan for Florida calls for increased tax incentives for small business and companies that hire Floridians. As governor, I will reward efforts to put more Floridians back to work by giving a new jobs tax credit to businesses creating up to 20 new jobs based in Florida during the next three years. The credit would be based on the employer’s share of federal payroll taxes and the increase in the annual payroll for the new employees. I will also push to defer state corporate income taxes of qualified startup businesses for the first three years. Finally, 37 states currently have R&D tax credits, but Florida does not, and I would work to change that.

850: Many local businesses, especially retailers, feel they are at a disadvantage because the state does not adequately enforce collection of sales taxes on Internet purchases made by residents. Do you support the Streamlined Sales and Use Tax Agreement or should Florida be more aggressive in its enforcement efforts?
AS: Right now we have an unfair situation with the collection of sales tax on Internet purchases where mom and pop stores on Main Street are at a disadvantage. However, I do not believe we should do anything to raise taxes in the current economic climate, and would only consider this proposal if we used the revenue collected on Internet purchases to lower overall sales tax rates.

850: What are your views on solar and other sustainable energy production?
AS: I like to say that Florida is the Sunshine State because of our beaches and tourists, but we should be known as the Sunshine State because we’re the national leader to capture the power of solar and renewable energy. Solar and other sustainable energies are a tremendous opportunity to create good jobs here in Florida, and that’s why I presented a detailed plan for Florida’s New Energy Future. As governor, I will be Florida’s economic ambassador to attract new, green businesses to our state. By highlighting the new energy innovations already taking place across Florida, and implementing consistent and supportive policies, I will create the environment needed for these businesses to attract investments and grow. New and renewable technologies present an opportunity to create a more sustainable, diverse economy that Florida needs to succeed in the 21st century and will be a significant focus for me as Florida’s next governor. And by the way, the leading renewable energy trade associations in Florida are all backing me because of my renewable energy plans and their ability to grow jobs in Florida.

850: How important is Florida’s higher education system in attracting new high wage jobs to the state — and what improvements would you make to the system?
AS: As a proven business leader and the first governor in twelve years whose own children graduated from Florida public schools, I understand the vital link between a vibrant economy, high-paying jobs and a quality education system. My comprehensive, 27-page education reform plan is built on a foundation of higher quality and more accountability. I will implement a comprehensive education plan focused on child readiness, quality instruction, accountability that measures student performance, investment in our teachers and principals, and getting parents and communities more engaged in our schools. Florida needs a governor who will lead on statewide education reform — by inspiring more local innovation and supporting the spread of best practices to all school districts.

850: Retirees have always been a job-creating, clean industry that is good for Florida’s economy. But Florida is losing market share of retirees to other states that can compete on home prices and offer better services. What should the state do to help local communities do a better job at attracting Boomer retirees?
AS: I will increase efforts to market Florida as a retirement destination nationwide. Florida’s housing prices have fallen more than just about anywhere else in the country, making them an ideal choice for seniors and retirees. I will also incentivize the development of Florida’s medical services industry. With improved health care resources, combined with our climate and Florida’s natural attraction to, and ability to handle, visitors, we can make health care delivery a major “export” industry. Attracting people from around the world to come here for extended treatments can generate immense amounts of capital inflows to our communities.

850: Northwest Florida’s transportation corridors are getting overloaded, causing a problem during the summer tourist season and for hurricane evacuation. Do you have any specific plans to address the traffic gridlock?
AS: The transportation issue is one facing all Floridians, which is why in early August I unveiled my plan to bring Florida’s transportation infrastructure into the 21st century. This plan includes ensuring stable funding of transportation through an increase in federal funding, stopping the raids on Florida’s transportation trust fund and encouraging innovative regional solutions. Currently, Florida is a “super donor” state for federal transportation funding. I will bring home more of our federal tax dollars by leading a coalition of states, and demanding Florida is at the negotiating table when funding allocations are made. This will allow us to build a more effective and modern infrastructure system for all of our state, including Northwest Florida.

The News Service of Florida contributed to this report