State Politics

State’s top economist diverges from Gov. Rick Scott in job growth strategy

Gov. Rick Scott addresses reporters and guests during a news conference unveiling the new Blue Origin rocket at the Cape Canaveral Air Force Station, Sept. 15, 2015. Amazon CEO Jeff Bezos announced a $200 million investment to build the rockets and capsules in the state and launch them using the historic Launch Complex 36.
Gov. Rick Scott addresses reporters and guests during a news conference unveiling the new Blue Origin rocket at the Cape Canaveral Air Force Station, Sept. 15, 2015. Amazon CEO Jeff Bezos announced a $200 million investment to build the rockets and capsules in the state and launch them using the historic Launch Complex 36. AP

While Gov. Rick Scott was in New York on Thursday trying to persuade companies to bring jobs to Florida, the state’s top economist and a House economic development leader were in Tallahassee questioning the governor’s strategy.

The Legislature’s economist, Amy Baker, explained to lawmakers a set of recommendations for economic incentive programs that differ from much of the approach that Scott’s office has pursued. Among her suggestions: focusing on small businesses already in Florida and prioritizing high wages.

At the same meeting, Rep. Jose Oliva, R-Miami Lakes, the House Economic Affairs Committee chairman, said that targeting industries for tax breaks or trying to bring specific companies into the state doesn’t work.

“As we try to sit here and economically engineer, we should look at the big picture and say, ‘What is the effect that we’re actually having?’ ” he said. “Not just to compare what is the result of a policy in the state, but how does that result match what would have happened regardless?”

Neither Oliva nor Baker referred to Scott by name, but their comments flew in the face of recent job growth work the governor has championed. Last month, Scott announced 40 new jobs at the South Florida location of 1st Choice Aerospace, a Kentucky-based company that already had a presence here. Early this year, the governor attracted Wawa, a Pennsylvania chain of convenience stores, to expand in the state.

If they’re likely to come anyway, you’re not really getting the bang for your buck.

Amy Baker, state economist

Scott stands by his economic development record, saying that Florida should continue to put a premium on attracting business from other states and countries.

“Of course, part of that diversification means competing to be the best state in the world for job creation,” his spokeswoman, Jackie Schutz, said in a statement. “We can’t afford to have the short-sighted approach that Florida doesn’t need to do anything to compete with other states, and even other countries, to create jobs.”

But Baker says the state should give more support to small businesses and entrepreneurs. Less effort should be spent trying to lure businesses in industries that might be drawn to Florida anyway.

“They or a competitor of theirs are likely to come to Florida anyway,” Baker said. “If they’re likely to come anyway, you’re not really getting the bang for your buck.”

She further pointed to the problems with using tax incentives to bring in large companies based in other states. The state’s return on the investment becomes diluted, as money ends up boosting economies in other states where a company already exists.

“The larger firms … tend to have a multi-state presence,” she said. “Benefits that you give to them tend to disperse beyond Florida’s borders.”

Moreover, she said, the state should require high wages from companies that receive tax incentives Median wages in Florida — adjusted for inflation — are lower than they were in 2009, at the height of the recession, according to state data.

Among Scott’s recent conquests, 1st Choice Aerospace jobs are expected to earn high wages — $66,000 per year on average — but that’s not the case for the Wawa convenience store chain.

“When you’re in the midst of a recession, just worrying about jobs and not thinking about wages is probably fine. You want to get people back to work and in productive work regardless of what the wage is,” Baker told the committee. “As you move to a more normal economic environment, you probably want to start thinking about wages as well.”

Contact Michael Auslen at mauslen@tampabay.com. Follow @MichaelAuslen.

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