By: Dr. J Antonio Vilamil, JMI Senior Fellow and Founder and Principal, the Washington Economics Group and Donna Arduin, President and Co-Founder, Arduin, Laffer, Moore Econometrics
Florida faces a once-in-a-generation election in 2018. The confluence of term limits, macro-economic outlook, and the political environment have combined to place Florida as ground zero in the economic policy debate being waged nationwide.
The two candidates running for Governor of Florida could not have more diametrically opposed agendas. In such a hyper-politicized atmosphere, it is imperative that Floridians become educated on the data and facts that will inform the choice they make on November 6.
Florida currently possesses the 17th largest economy on the planet – one trillion dollars of goods and services will be produced, distributed, and consumed in 2018. Our population has boomed over the past 20 years to more than 20 million residents – an increase of more than 1,000 every single day. Florida’s employment growth over the last two decades has been one of the strongest in the U.S., despite the 2007-2008 recession.
Florida’s economic policy agenda of low and stable taxes combined with a pro-growth private sector-oriented strategy has led to a top business climate ranking among the 50 U.S. States. This has attracted, retained and expanded business activities, resulting in strong employment expansion among most industry sector categories.
The policy agendas of both principal candidates for governor are radically different, impacting economic activity and employment expansion. Every single sector of our economy will either reap the benefits or suffer the consequences of the decisions made by our elected leaders.
Candidate Andrew Gillum’s policy agenda – to increase the corporate tax rate significantly, almost double the minimum wage, sharply expand government-controlled health insurance, and mandate a $50,000 starting salary for teachers – would adversely impact the business climate of the state through higher taxes, a sharply higher minimum wage and state mandates to expand government-controlled health insurance.
All told, the policy agenda Candidate Gillum proposes would require an increase in the corporate tax rate to the 2nd highest in the United States, an increase in Florida’s sales tax to 39 percent, or the imposition of a state income tax as high as 37 percent.
Consequently, the economic impacts of abandoning the current low tax/top business climate rankings of Florida, based on the experience of the higher tax states presented in this brief, would ultimately cost Florida direct employment losses of 155,000 jobs, $16 billion in lost GDP, and $28.2 billion in total economic losses per year.
Candidate Ron DeSantis’ agenda – to largely maintain the pro-growth-oriented strategy of Florida through low and stable taxes, would preserve and strengthen the state’s business climate, which supports the attraction, retention and expansion of employment-generating business enterprises. This agenda also includes investing in the “classroom” the savings from lower educational administration costs, and in technical/vocational programs to improve workforce development. Ultimately, this agenda would lead to the creation of 215,000 jobs annually, $15 billion in GDP, and $26.6 billion in annual economic output.
Elections have consequences, and policy agendas have costs and benefits to them. Ultimately, it is up to Floridians to weigh the costs of each candidate’s agenda and determine what policies will bring about Florida’s more prosperous future.
On November 6, 2018 we will have our say.
Read “Election 2018: Platforms, Proposals, Projections” here: https://www.jamesmadison.org/wp-content/uploads/2018/10/Election-2018.pdf