Some sectors of Florida economy boom -- but others still languish

TALLAHASSEE -- It was a simple campaign mantra and the yardstick by which Gov. Rick Scott will be judged when he goes back before voters: 700,000 jobs in seven years.
At the midpoint of his first term, the Republican political neophyte hasn't shied from the campaign pledge that he spent one-third of his $218 million in personal wealth to convey to voters in 2010.
"Let's go through the numbers: biggest drop in unemployment ... we've got tourism at record levels, home prices are up, home sales are up, construction is up, exports are up," Scott said in an interview recently.
"So we're doing the right things, and it is working. Would I like everybody that wants a job in Florida to have a job already? Yeah. I wish we were already there, but we're headed in the right direction."
But the numbers tell a more complex story. The economy is recovering like gangbusters in some traditional Sunshine State boom sectors such as tourism. But by some measures, Florida is in worse shape now than when Scott took office.
Floridians' per-capita income has been flat since Scott was inaugurated. Though the jobless rate has dropped, more than half of the decline is attributed to people leaving the work force. Two key job sectors -- construction and government employment -- actually employ fewer people today than in 2010.
And though Florida's tourism and professional-services sectors are humming, others such as retail, education and transportation are projected to produce fewer jobs than economists had predicted two years ago. Indeed, projections that Florida would create 632,100 jobs by 2015 have been cut back to 454,900 jobs.
So how do voters decide whether Scott's jobs agenda is working?
In coming weeks, the Orlando Sentinel will look in-depth at whether the ex-corporate CEO has made inroads in his signature "7-7-7" plan to create jobs, cut taxes, reform government entitlements, slash regulation on development and promote "world-class universities."
By many measures, the governor can claim progress on regulatory and unemployment reforms, modest tax cuts and new companies pledging to add jobs for a price. But his track record has been clouded by an inability to move much of his agenda through the Legislature.
And there's another, bigger problem in trying to assess Scott's progress: Economists and policymakers alike say it's pointless to try to determine how many jobs the governor should be given credit for creating. That's because Florida's economy is powerfully shaped by national and international trends that no governor has power to influence.
The downgraded jobs forecast, for instance, is largely attributed to the European debt crisis, uncertainty over the "fiscal cliff" in the U.S., and Florida's slower-than-expected processing of foreclosed homes and sales.
"The total jobs numbers are going to be controlled by the global economic environment. No governor can control that," said Tony Villamil, an economics professor and dean of the Business School at St. Thomas University in Miami Gardens and member of Enterprise Florida's directors. "I never wanted someone to say, 'I will create 700,000 jobs in seven years.' "
The jobs numbers tell a complicated, seemingly contradictory story of economic recovery as the state emerged from the Great Recession.
Florida's unemployment rate was 11.4 percent in January 2011 -- and was down to 8.1 percent in November. In raw numbers, that translates to 160,000 more people with jobs. An additional 760,000 people were unemployed and looking for work in a labor force of 9.3 million.
But state economists reported recently that 57 percent of this year's drop in the jobless rate was because fewer workers are seeking jobs -- and that the state was still 703,000 jobs below its pre-recession peak. Simply put, while new jobs are being created, an even greater number of workers have left the labor force.
What's more, given Florida's population growth, economists said it would take 1 million new jobs to get back to the same pre-recession level of employment.
Still, the governor's mantra heading into the second half of his term is that Florida's economic picture has dramatically improved.
"We've had great progress on getting our state back to work," Scott told reporters this month, touting his seven trade missions to Brazil, Spain, Colombia, Canada and elsewhere to "develop relationships" with companies.
Democrats argue the governor has been claiming credit for job creation while simultaneously damaging it with massive spending cuts that led to layoffs of teachers, state employees and workers at companies such as road builders that rely on government contracts.
"You can't say you brought a factory here with 100 jobs when through your cuts to education you've caused 200 other people to become unemployed," said Senate Minority Leader Chris Smith, D-Fort Lauderdale.
The governor's legislative allies say Scott should be judged not by job totals but by what he has done in office: the policies and programs he promised to reform to generate jobs.
"The governor can't control the national economy. The governor can't control the eurozone," said House Speaker Will Weatherford, R-Wesley Chapel. "I think the best measure of anyone in the political process is, did he do the things he said he would do? I think the answer is unequivocally yes."
But by that measure, many of the governor's big-ticket tax-cutting and spending proposals remain undone -- and are unlikely to be complete by the time he faces re-election.
Consider:
*Scott pledged $2.1 billion in property and corporate tax cuts his first year in office. Including other budget cuts, his first-year economic plan called for steering $3.64 billion from public spending back to the private sector. Economists say a private-sector stimulus of that amount could have had a measurable impact on the state's economy.
But GOP lawmakers passed only a tiny fraction of that, a total of about $240 million in property and corporate tax breaks, and cut just $30 million out of the corporate income tax.
*Another core plank of his agenda was reforming the state's budgeting process and cutting spending. But lawmakers have never implemented his "accountability budgeting" proposals. The state budget's overall size has risen -- even as the number of employees has fallen.
*Yet another promise was to repeal onerous government regulation. Lawmakers did comply and blew up Florida's old growth-management process. More than 1,100 agency rules have been identified for repeal, although many more have been proposed to take their place.
And instead of giving him more economic-incentive funding, lawmakers cut the dollars available -- and promise a deeper evaluation next year about whether the incentive programs work.
Donna Arduin, the former Jeb Bush budget director who developed Scott's "7-7-7" plan, said it was impossible to evaluate his performance based solely on Florida's job figures, given that much of the plan was not implemented.
"You really need to look at how the state has improved relative to other states," she said. And if lawmakers decided to make major tax cuts during the next two years, "that would make a big difference."
Others aren't so sure.
"The notion of simply cutting taxes and reducing regulatory burden in a state with a moderate level of regulation and extremely low taxes doesn't make much of an impact," said Orlando economist Hank Fishkind, whose firm works for land developers.
But what experts say is certain is that the economy has taken longer to recover than any forecast in 2010. Personal-income growth, for instance, is weaker than before Scott took office in 2011. Per-capita income was projected to grow to $38,853, an increase of $3,233. Instead, it's currently on pace to grow by only about $1,000 by mid-2014.
At the heart of the slower recovery: Overbuilding during Florida's boom in the mid-2000s created a large housing surplus that, combined with tougher bank lending policies, has delayed the normal post-recessionary recovery economists expected in Florida's all-important construction industry.
"No one -- no one -- anticipated how long the duration of the Great Recession would be," said Amy Baker, the Legislature's chief economist. "That kept pushing out the growth rate you would expect."

A mixed picture of Florida's economy
Gov. Rick Scott inherited an economy projected to generate 958,400 new jobs during 7 years. Today, those projections have been revised down to 741,300 jobs in the sameperiod. Per-capita personal income has also slowed since Scott took office in 2011. But economists say both trends have had more to do with the slowpace of national and international economic recovery than any of Scott's policies.

For details on charts, see print newspaper.
adeslatte@tribune.com or 850-222-5564

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