Manufacturing Tax Credits: Why would they work now?

In the home stretch of the 2013 Session, Governor Scott has decided to make $115 million in manufacturing tax breaks one of his biggest legislative priorities. But for years Republican legislators have nave promised tax breaks for industry and manufacturing and have produced very in little return for the state. Florida ranks 43rd in manufacturing nationally despite having the nation’s 6th biggest economy, and 4th largest population. This is after sixteen years of Republican control of the State Legislature. The fact is Florida just doesn’t have the skilled workers or educational system when it comes to trained professionals in manufacturing for this to ever work.

The Governor can take some credit for the improving economy. His efforts to have Boeing relocate its training center to Miami and to expand Florida’s Port business have been successful. But those are not at all related to manufacturing as Florida’s economy is service based and the growing import/export sector has benefited directly from recent efforts. As Governor, Rick Scott has improved the economy Editespecially when compared with his predecessor Governor Crist, this futile effort to attract manufacturing jobs could in fact be damaging  and expensive side show, taking the focus off what is important in our service based economy.

For all the tax incentives and rhetoric of Republicans in the legislature and executive branch they have proven over the past decade they are consistently unable to attract heavy industry to the state. Interestingly, Republicans in neighboring southern states have fared much better at attracting large corporations to either relocate or set up major manufacturing operations. Alabama, Tennessee and South Carolina have all been wildly successful in transitioning their economies towards more manufacturing. Florida on the other hand has repeatedly failed in this effort.

For a state of its size, one of four true “mega-states” with more large and medium sized urban areas than any other state in the US, Florida has a pathetically small number of Fortune 500 companies based in the state.  Despite a tax rate lower than most states and “right to work” status which prevents unions from effectively organizing, Florida’s Republicans have failed badly in attracting manufacturing jobs. For example, Virginia has attracted five new Fortune 500 companies to the state in the past decade. Florida has attracted none. While having the fourth largest population in the country and total Republican control of state government for 14 years, Florida ranks just 11th in Fortune 500 company headquarters.

While unable to attract new industry or foster a climate of innovation that develops successful companies the Republicans have done more damage with cuts to Higher Education that have resulted in the plummeting national reputation of the state’s top universities.

Perhaps the Scott agenda is to protect current Florida businesses by busting unions, lowering taxes and preventing competition or innovation in the marketplace. Weakening higher education ensures that chances of a well educated workforce emerging to threaten the old order are remote. Tax breaks for manufactures benefits current manufactures in the state but has not brought new jobs in this sector in an effective enough manner to justify the $115 million expenditure.

Republicans and Democrats in other southern states deserve credit for their ability to encourage and solicit economic development from large corporations creating heavy manufacturing jobs. The types of blue collar jobs complimented by high end corporate jobs that Georgia, North Carolina, Alabama and Tennessee in particular have attracted over the last fifteen years is admirable. While those states have moved forward, Florida, once the envy of the region has stagnated or regressed. While Republicans in other southern states have taken governing seriously, Florida’s GOP have chosen to use control of state government as an opportunity to implement the experiments of right-wing Washington think tanks and special interest groups. It is no small wonder Florida continues to be the butt of jokes nationally.

Governor Scott has made progress with Florida’s economy especially when compared to the shameful and embarrassing record of his predecessor Governor Crist, but this manufacturing tax credit could damage that progress.

2 comments

  1. […] We’ve extensively discussed Governor Scott’s flawed logic in pushing for manufacturing tax breaks and the success states like Alabama have had while Florida has flopped in seeking similar jobs.  We have also pointed out how corporate tax breaks pushed by Jeb Bush, Charlie Crist and now Scott have done little to attract new investment in Florida. […]

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  2. […] spent a lot of time on this website over the past few weeks discussing the manufacturing tax breaks pushed by Governor Scott. As I have stated regularly, these tax breaks have not worked in the past […]

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