Gov. Rick Scott’s 700,000 jobs plan appears out of reach
12/09/2013 3:27 PM
12/09/2013 5:04 PM
Editor’s note: This is the last of three parts of a series examining Gov. Rick Scott’s jobs record. There is an enhanced version of this story available. Read it here.
Gov. Rick Scott took office in 2011 with a simple plan he promised would invigorate the state’s economy.
Over seven years, through seven steps, Florida would add 700,000 jobs. Shorter: 7-7-7.
Not only that, the state would see improvements in its gross domestic product, personal income and tax collections, all achieved through putting government on a diet and giving taxpayers a break.
Three years into Scott’s tenure, Florida is recovering in ways that surprise economists. The unemployment rate is down dramatically, below the national average, and the state has churned out hundreds of thousands of new jobs.
But are Florida’s gains enough for Scott to keep his biggest campaign promise?
PolitiFact Florida, the fact-checking website launched in 2010 by the Tampa Bay Times and Miami Herald, is monitoring 57 campaign promises Scott made in 2010, including his pledge to create 700,000 jobs.
Each promise is assessed and rated on the Scott-O-Meter as Promise Kept, Compromise, In the Works, Stalled or Promise Broken.
The jobs numbers, if you were to jot them onto a napkin, look good.
Florida has added 406,000 jobs since January 2011, and the biggest monthly boost is the most recent. In October, the state added 44,600 jobs, according to preliminary federal data.
Better yet, jobs are coming faster in 2013 than in 2012 and 2011.
Beyond the numbers, however, lie two critical questions:
1.) What did Scott actually promise voters in 2010?
2.) Is Scott’s 7-7-7 plan the reason those 406,000 jobs came to Florida?
Scott’s campaign promise
When Scott debuted his 7-7-7 economic plan in July 2010, nonpartisan economists at the Legislature’s Office of Economic and Demographic Research had just released their estimates for Florida’s long-term jobs outlook.
They concluded Florida would add 1.05 million jobs between July 1, 2010, andJune 30, 2018, and it didn’t matter who lived in the Governor’s Mansion — Scott, Democrat Alex Sink or someone else.
To account for the news, Scott clarified his promise. His 700,000 jobs would come in addition to the ones state economists forecasted.
Put simpler: 7-7-7 became 7-7-1.7 million.
That promise is a lot harder to keep. It requires the state to produce more than 20,000 jobs on average per month, every month, for seven years.
To date, Florida is averaging 12,000 jobs a month.
“Florida is going to come nowhere near exceeding normal job growth by 700,000 in seven years, no matter how you define it or time it,” said David Denslow, a retired University of Florida economist.
Scott’s influence on jobs
The math on Scott’s 7-7-7 plan actually adds up to 661,914 jobs. The campaign rounded up.
The plan outlines seven steps to reach the goal: Implement accountability budgeting, reduce government spending, enact regulatory reform, focus on job growth and retention, invest in the university system, reduce property taxes, and eliminate Florida’s business income tax.
Scott promised an economy better off because of his policies, but many of his ideas from the campaign did not survive, said Rollins College economics professor William Seyfried.
Scott saw success in some areas, such as privatizing inmate health care, shaving the state’s workforce and making state workers contribute to their pensions.
Other, bigger ideas were rejected by the Legislature outright or only adopted in part. Take his biggest tax proposals: eliminating the corporate income tax and drastically reducing school property taxes (while sparing schools from cuts through other savings). Scott made headway in relieving many firms of paying the business tax, but the Legislature rejected his push to go further (PolitiFact Florida rates that promise Stalled). And talk of cutting school tax money has turned into calls for boosting school funding (Promise Broken).
And when Scott suspended proposed regulations until his office could review them — part of his regulatory-reduction effort to generate 240,000 jobs — the Florida Supreme Court said the executive order overstepped his authority. Scott changed course.
“Regulatory relief and tax reform tend to have a gradual effect over time rather than a significant impact right away,” Seyfried said.
The issue with the 7-7-7 plan, Denslow and other economists say, is it assumes power and influence a governor does not have.
Florida’s governor is even weaker than most because, his line-item veto power aside, the Legislature carries more economic authority, Denslow said.
Still, the state once seen as a laggard in the national recovery is now seen as a leader, and Scott is perceived as making the state as business friendly as possible, said Mark Vitner, a senior economist at Wells Fargo. The state has done well in attracting international tourism and housing investments from Brazil, Great Britain and Canada, he said.
“He’s been very active in recruiting businesses and encouraging economic development at the local level,” he said.
Whether Scott gets credit for the job growth is an age-old debate. Executives at all levels of government often take credit for the good times and deflect blame for the bad.
In Scott’s case, economists say it’s too hard to parse out and too soon to tell what jobs are here directly as a result of his stewardship.
Even the architect of the 7-7-7 plan, Donna Arduin, told the Times in 2010, “You’re never going to know which jobs were created because of which event.”
Part of national trend
The biggest gust behind Florida’s economy is the national business cycle, said Mekael Teshome, a PNC Financial Services Group economist who studies the Florida market. If the economy is improving here, it means conditions have improved nationwide. For decades, the state’s success was built on growth, the continuous influx of new residents and housing construction.
When people have more expendable income, more people visit Florida. When the economy improves around the country, retirees feel better about moving to Florida. And when housing picks up regionally, it lifts the rest of the state.
“What we’re seeing in Florida has more to do with the macro trends than particular policies,” Teshome said. “In terms of what proportion of that recovery was due to government versus the normal business cycle, I don’t think anyone’s really got that number.”
The types of industries in a state also are important. Florida’s boom and bust was fueled by housing. Meanwhile, Texas performed relatively well during the recession thanks to its agriculture and energy sectors.
“You could say Gov. Rick Perry is great, and maybe he is and maybe he isn’t, but a lot of its success is due to the type of industry they have,” Seyfried said. “Florida’s economic performance in recent years was driven by the bursting of the housing bubble.”
Where Scott stands
So where does this leave Scott’s promise to create 700,000 jobs?
The state has added jobs, a good sign after years of recession-driven losses. But Scott needs more job growth than ever to have a chance of fulfilling the promise he made during the campaign. Economists doubt he will reach his original goal — and that’s putting aside an argument about how much his policies affect job growth.
For Scott to deliver, Florida needs to create 26,000 jobs a month, every month, for 50 straight months.
That happened only five times in Scott’s first 34 months in office.
The odds are stacked against him, but jobs are coming and Scott is trying. We rate this promise In the Works.
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