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Alex Sink's business plan will not get her elected governor.
Nor will it make Florida's business community rally behind her.
We'll give Florida's chief financial officer this, though: As far as private-sector business experience, Sink is smart to play up her career as a banker compared to that of her Republican opponent, Florida Attorney General Bill McCollum. Businesswoman-turned-politician versus career politician. McCollum better have some big ideas.
We'll spare you the time it would take to read Sink's recently released business plan for Florida and dissect it for you.
For the most part, it has the predictable politico-hackney-speak. To wit:
“Alex Sink believes ... “Florida Must be a Land of Opportunity” ... “Florida Should Do Everything Possible to Support our Businesses” ... “Florida's Governor can bring our State Together to Achieve Success.”
Bring out the caffeine.
And you have to strain to find anything innovative, groundbreaking or outside the political comfort zone of what we call “government in the margins.”
Her business plan is ... safe, obviously intended not to offend any particular interest group.
What's not in the plan:
• There's no mention of tort reform.
• There's no mention of any bold steps to address Florida's dysfunctional property insurance market.
• There's no mention of Florida's impending commercial real-estate crisis.
• There's no mention of growth management.
• No mention of oil. The closest Sink gets to the petroleum tar ball is to regurgitate what all the politicians say, Democrat and Republican alike. Says Sink's plan: “We need the commitment, leadership and supportive policies necessary to make Florida a global leader in new and renewable energy.” No word on what she means specifically.
It's not all bad. There are some good ideas. So let's play those up:
It may sound like political pablum, but given Sink's experience as the CEO of the old NationsBank in Florida, you have to believe Sink really understands what she says when she says “Florida must be a land of opportunity.” She is also saying she doesn't see the role of government as that of Nanny, unlike many of her Democrat Party colleagues.
We should like that she put the following in print in her business plan:
“Alex will work to maintain Florida's position as a low-tax state for businesses and create an environment that is consistent and helpful, while removing unnecessary barrier to growth.”
We should hold her to this.
We should like this, too:
“The state's governor must be Florida's marketer-in-chief, and Alex will serve as our state's chief jobs ambassador.”
Let's hope she really means that, and that it means much more than taking “trade-mission” vacations to South America and Europe.
You should like this one, too:
“Alex knows that economic growth doesn't really come from government — it comes from business. But good government can help the private sector drive growth.”
The first sentence is reassuring. But put the two together, and there's a philosophical mix — the first being classic, liberal, free-market economics, the second being the message that, as a Democrat, Sink also believes in government intervention. Sink has been great these past four years being philosophically vague. Few people outside of her sphere know just how far she believes government should intervene in the economy.
Our guess is she has deliberately maintained her CFO position as a moderate in contemplation of this day. If she is to have a chance at becoming Florida's governor, she cannot appear as a far-left libbie as much as her husband, Bill McBride, did when he ran for governor against Charlie Crist. But you know how it goes in this arena: Start out moderate, get elected, then shift left.
In fact, when you get beyond the general platitudes and into the specifics in Sink's business plan, you can see she's a traditional politician. She wants to use other people's money on programs that suit her social and economic agenda.
To wit:
Short-Term: Revive Economy, Create Jobs Quickly
• Strategy One: Stabilize and Expand Small Business
Topping this strategy is Sink's desire to “ensuring access to capital” for small businesses.
She writes of “encouraging innovative programs for better access to venture capital, micro-lending and ensuring that our businesses have the funds and the technical assistance needed, including coaching on budgeting, money-management, use of financial intermediaries, and other things that larger businesses take for granted.”
Why is this a role for state government?
Sink's biggest tax idea is “to defer state corporate income taxes of qualified startup businesses for the first three years. Qualification criteria would include considerations such as payroll size, annual revenues generated or having the business and its employees based in Florida.”
“Deferring taxes,” Sink writes, “would provide the equivalent of an extra 5.5% profit margin in those first three years, boosting their chances of survival.”
Sink says accepting this tax break would obligate the business to a lien with the state in the event of bankruptcy.
This is where Sink fiddled in the margins. Tax deferrals are tinkering.
If Sink really, really wants to revive and jumpstart Florida's economy, she should have proposed eliminating the corporate income tax altogether.
Imagine the message this would send across America to companies looking to lower their tax burdens. And imagine the new capital that instantly would become available to Florida companies to re-invest, grow and generate jobs.
• Strategy Two: Creating and Keeping Jobs Here
Sink has four parts to this:
1. Tax incentives for creating jobs. She wants to extend a “corporate income-tax credit to businesses creating up to 20 new jobs based in Florida during the next three years.”
This is a worn-out shoe leather. Politicians never get it: Hiring people is not a benefit to a company. It's a cost. Businesses don't hire people just to get a tax break. They hire them if they need to fill orders or to do a job that will make their business more efficient.
What's more, once the state starts doling out three-year tax credits, the state creates a need for bureaucrats to monitor these special gifts. Bureaucracy grows.
We'd all be better off if politicians would quit gerrymandering tax codes to create incentives. A better route would be if Sink focused on creating the best business climate and best business framework possible.
And that framework always involves low taxes and low regulation — the two most potent ingredients for a robust business climate.
2. On regulation, Sink's business plan is dull and vague — bring “greater speed and certainty to permitting decisions without gutting environmental and public safety protections ... streamline regulations and the regulatory process and creating an easier interface with government.” Blah, blah, blah.
3 and 4. Like a good governor, Sink promises to do what all governors promise: work with Florida's congressional delegation to increase Florida's share of federal handouts and make sure Florida companies get more state contracts. Right out of the gubernatorial manual.
Long-Term: Remake Our Economy
Sink says Florida “can invest in key industries”: Medical services; renewable energy; homeland security/defense; creative industries and the arts; aviation/aerospace; emerging technologies; life sciences; information technology; financial/professional services; manufacturing; marine resources; and agricultural.
Apparently, Sink's definition of investing in these industries means:
• Creating tax credits for companies' research and development costs;
• Creating energy finance districts, similar to enterprise zones, that would provide government loans for businesses and residences to retrofit their properties with energy-efficient systems. These loans would be repaid “from riders” on the owners' property-tax bills.
• Increasing from 1.5% to 3% the amount of the Florida Retirement System Trust Fund's assets to be invested in the state's high-tech and targeted industry sectors.
All of these are not out-of-the-box innovations. Other states have been employing these “tools.” But like many of Sink's economic ideas, these, too, have that look and feel of an activist government tilting the tables to benefit different groups.
That always brings trouble. And it always breeds more government, more government intervention and more pull-peddlers begging for more favors in the halls of government.
Give Sink credit for giving serious thought to Florida's economy. But let's hope we live to see the day when a gubernatorial candidate, asked what he or she plans to do for Florida's economy, simply responds: “Laissez faire. I'm going to get out of the way and leave it alone.”
Create the framework — low taxes, low regulation — and let it work.
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