Elected on a platform of “jobs, jobs, jobs,” Governor Rick Scott has been addressing importing businesses from other areas of the country and enticing start-ups to view Florida as fertile ground for their new endeavors.
On behalf of those of us suffering through the current, multi-year real estate downturn, thank you for your much needed efforts, Governor Scott.
Job creation is exactly what we need.
A recent report published by Freddie Mac’s chief economist (“Job Market News is One Step Forward in a Long Journey” --March 14, 2011) states that while it is good news that job creation is starting to pick-up, until we reach the (nationwide) rate of over 250,000 new jobs per month, we will not make significant gains in lowering the unemployment rate. And until we substantially lower unemployment, the housing market will languish.
The report adds: “The important point for the housing market recovery is not the unemployment rate itself, though, but whether jobs and incomes are rising rapidly enough to support housing demand and keep borrowers current on their existing loans.”
Locally, Team Volusia has formed as a county-wide effort, and several cities are implementing their own economic development plans.
Talk is cheap, though. How do we know that efforts at the state and local level will create jobs and improve the housing market?
The Governor, thankfully, is addressing the state regulatory burden as a part of his efforts. Is this happening locally in a meaningful manner?
I have participated in Economic Development efforts for years, most recently in Duval and Volusia Counties. I have learned that existing or new businesses considering relocation/start-up focus on the upfront costs and requirements (short term environment) and sustainability (long-term environment). Three major areas are considered in their initial feasibility analysis:
1. Quality of the existing workforce and the level of help available to get workers’ skills redirected to the needs of the new business/industry;
2. The corporate and property tax burden; and
3. The regulatory environment on the state and local level.
Also considered are the availability of development-ready land and buildings, transportation, quality of local schools, along with quality of life and cost of living for employees.
Taxes and fees unarguably add to the cost of doing business. If the bottom line is not improved, why move? If the cost of developing new business in one area is too high, there are many other welcoming places to consider.
Workforce quality – including local education opportunity – along with taxes and fees are readily identified and quantified. It’s the regulatory burden that is often obscure and/or uncertain, sometimes with conflicting requirements between various authorities.
What business and capital investment most requires is the greatest degree of certainty (and conversely, the least risk.) What many governments don’t seem to understand is that they don’t sufficiently provide this most requisite element which they largely control. Prospects must know:
• What permits are required and how are they most efficiently acquired?
• How long does it take to get a project approved, what does it all cost (including impact fees), who is really in charge and what are the hidden barriers?
• How does one get information about the process and requirements in one package?
• What information is available BEFORE getting started to know with reasonable certainty that the business can open on time and on budget?
While I’m sure various businesses have other questions, they would need answered before making a major commitment, that’s a reasonable start.
Florida used to be known as a business-friendly state, but those days are over. We are currently a high-cost, high regulatory, low certainty state.
There is much that must be done to streamline regulation and generate confidence to ensure a business-friendly environment. The Governor has a high level of control of state regulations through state agencies’ rules, his work with the legislature and his ability to communicate CEO to CEO.
Despite his strong commitment to jobs growth, however, he can’t do it all himself or all from Tallahassee.
What we can’t forget is that the businesses will locate in counties or cities that have their own processes and regulations.
Creating jobs in Florida -- and thus creating prosperity, a dependable economic base and a restored housing market -- requires local governments’ commitment to a streamlined and predictable regulatory burden.
They must take this to heart or they are wasting time and precious dollars.