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Before the Legislature convened, one of the refrains from legislative leaders and the governor was jobs ... how lawmakers needed to focus on ways they could re-energize Florida's economy.
This was urgent. Florida's unemployment rate stands at 12%, and 1.1 million Floridians are unemployed.
Judging from the press releases from the governor's office and some of the state's leading business groups, you might think lawmakers approached near-hero status for their job-creating legislative efforts. The way it sounds, Senate Bill 1752 will send Florida on its way back to prosperity.
That's what they seem to be saying anyway.
Maybe it's our cynical nature, but SB 1752 blows.
More on that in a minute.
Altogether, when you do a quick assessment of what happened the past 90 days in Tallahassee, you can say Florida's business sector and the state's economic climate fared well. Lawmakers, in short, did no harm.
The best part: They adopted no new taxes.
From a defensive perspective, which is what most of Tallahassee lobbying is about, protecting your back, business groups held off and defeated most of the initiatives that could have inflicted damage. The two most prominent anti-business assaults that failed were the huge increase in the state's unemployment compensation tax (put off for a later year) and an effort to increase the corporate income tax and intangibles tax.
This one is worth liking, too: Senate Bill 72. It involved defense and offense. Ten Republican senators on the Health Regulation Committee — several from our region, including Mike Fasano, Rhonda Storms, Mike Bennett and Garrett Richter — fought back against ObamaCare and led the way for a proposed constitutional amendment that would preserve Floridians' freedom to provide for their own health care. Florida voters in November will decide whether to adopt an amendment that says “A law or rule may not compel, directly or indirectly, any person, employer or health-care provider to participate in any health care system.” Take that, Congress. Let's hope it passes and withstands constitutional tests.
From the perspective of playing offense, Florida's retail industry managed to push back the Trial Bar with a new law that no longer holds business establishments liable if someone slips “on a transitory foreign substance” and is injured. The injured must prove the business knew of the dangerous condition and should have corrected it.
Prior to this, as you can imagine, trial lawyers had a heyday going after the deep-pocket retailers if a consumer slipped on a substance about which the store had no knowledge.
There were other minor examples of legislative offense that will improve Florida's business climate, a bill that will lessen some permitting regulation and one requiring the state to assess the cost of new regulatory rules on small businesses before they are enacted. But the one piece the politicians and business lobbyists are touting the most is SB 1752, dubbed “Jobs for Florida.”
Well, maybe it should be called “Jobs for manufacturers, especially airplane and boat manufacturers; Space Shuttle-related businesses; movie makers and QTIs.”
(What's a QTI? It's what the politicians and economic-development jocks like to call “qualified target industry,” which is not most of Florida's businesses. Read Florida Statute 288.106.)
In other words, SB 1752 is your standard economic-development formula: Give subsidies and tax breaks to those businesses that are the politicians' favored groups of the day.
These days, the movie dudes have replaced the drug and medical research firms that won all the free money during the Jeb Bush era.
For the next five years, Florida taxpayers are going to give movie makers $20 million a year in sales and use tax credits and credits equal to their annual corporate income taxes.
The movie recruiters who work in counties' economic development offices are thrilled with benevolence, because now they can compete with all of the other idiotic states giving similar and larger tax breaks to the Hollywood crowd.
It's remarkable how the governor, state lawmakers and chamber of commerce types hail these “incentives.” They apparently never think about who must make up that $20 million the politicians have given away.
Their response is always: These are businesses and jobs we otherwise would not get. And think of the multiplier effect of the spending that results when the movie moguls make their blockbuster films here.
If we have to give special tax breaks to attract business, shouldn't that say something about a fundamental problem with our economic climate and tax structure? It's really simple: Businesses go where the tax regime is least offensive.
The multiplier arguments also ignore how that $20 million in tax subsidies, if left in Floridians' hands, would be invested. The subsidy-granters just assume the Floridians, who must pay $20 million more in taxes to cover the movie guys' tax breaks, will not invest that $20 million in ways that will generate the same economic multipliers as the movie makers. This assumption is wrong. In fact, it's just as plausible that some Floridians might invent businesses that generate more than the movies.
And then there's the moral issue. Take all of us slugs whose businesses don't meet the Qualified Target Industry standards — such as hotels, newspapers, law firms, accountants, contractors or retailers. It apparently matters not a hoot to the economic-development promoters that there are thousands of businesses in Florida that dutifully pay their taxes year after year after year and never even get a thank-you for paying taxes or employing people. How fair is that — for the “state” to pick winners and losers? The state should be amoral.
There is not enough space here to spell out all of the other “incentives” and subsidies in SB 1752. But it's the same ol', same ol'. When you read through the bill's analysis and fiscal-impact statement, it's mind-numbing the amount of bureaucracy and record-keeping that has mushroomed as a result of creating these gargantuan subsidy schemes.
The defenders of these schemes throw out all kinds of statistics showing how many QTI jobs have been created and how many businesses have opened in tax-subsidized enterprise zones. This, of course, justifies what they do.
But once you wade through all of this process, the fact is the 2010 session of the Legislature did little to provide a different framework that would ignite widespread economic growth in Florida.
To be honest, it wasn't expected. Senate President Jeff Atwater wasn't going to be bold and risky; he's trying to be elected Florida's chief financial officer. House Speaker Larry Cretul, unfortunately, worked in the fumes of deposed Speaker Ray Sansom, and therefore had limited influence (as well as limited creative leadership).
And then there was Charlie. Talk about squandered opportunities. Had he really put the people first, he could have eliminated the corporate income tax; deregulated property insurance; and eliminated the local-level school property tax in exchange for a higher sales tax. All that would generate Jobs for Florida.
Florida Chamber of Commerce: “The big winners in the 2010 legislative session are Florida's economy and the more than one million Floridians looking to return to work. Floridians saw no new taxes, no new union mandates, no increased litigation ... The Florida Chamber asked the legislature for three things: to do no direct harm, pass a visionary Jobs for Florida package and further close the looming talent gap by passing bold education reforms.”
Associated Industries of Florida: “There are a number of positive impacts associated with the jobs bill. Not only does it encourage Florida-based manufacturers to invest in machinery and equipment over the next two years, but this legislation also accelerates tax credits for capital-intensive industries in return for adding new, high-paying jobs, including digital media companies and others that represent the new 'Intellectual Property Economy.' Additionally, this bill helps address the needs of the space industry in Florida. For more than three years, keeping space workers employed and maintaining Florida's position as a leader in space innovation has been a top priority for AIF. SB 1752 will allocate much-needed funding that will help Space Florida and its partners overcome the budgetary shortfall at Kennedy Space Center and will go a long way to address the dramatic job loss facing the Space Coast as a result of the phase-out of the space shuttle program.
National Federation of Independent Business-Florida: “Small business owners can breathe a sigh of relief that no substantial increases in taxes and fees were passed on to them this year ... The first day of session made it clear, however, that lawmakers got the message that the state's job providers needed relief from higher taxes when both chambers passed a suspension of the unemployment tax increase.”
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