Warmer economic climates heat up competition for jobs


By Jim Waters - Bluegrass Beacon



Florida Gov. Rick Scott’s recent stop in Kentucky to try and convince businesses to move south to the Sunshine State was met with predictable derision from the political establishment.

Louisville Mayor Greg Fischer used Scott’s visit to remind people of the Florida governor’s baggage from his past tenure as CEO of the Columbia HCA hospital chain, which purchased Humana’s “Galen” hospitals in the early 1990s.

Scott in 1995 moved the company’s headquarters and its 1,000 jobs from Louisville to Nashville, citing Kentucky’s high taxes. He was forced to resign in 1997 in the midst of a $1.7 billion settlement related to Medicaid fraud.

“And now, this guy is coming to Kentucky and saying, ‘Trust me?’” Fischer said. “I don’t think so.”

But Scott isn’t preaching “trust me.”

He’s in competitive mode, promoting the Sunshine State’s warm business climate—including lower taxes, less regulation and the freedom to say “no” to paying union dues without losing your job.

“You don’t have to worry about your taxes going up because the credit rating is not one of the worst in the country,” Scott said, rightly noting that’s “what’s happened in Kentucky.”

Scott’s not the only one who’s touting Florida.

“Friendlier tax codes make it a little easier for us to do business there,” said Chris Yeazel, owner of 1st Choice Aerospace, which has decided to expand in Scott’s state rather than at its Hebron location.

The decision by the company, which repairs interior items on commercial aircraft, means 40 new jobs and a $7 million investment will go to the Sunshine State instead of Kentucky.

It’s fair game for Scott’s critics to question his integrity.

Credibility matters.

However, Scott isn’t the only governor to come and contrast his state’s attractiveness with Kentucky’s slower economic growth.

Then-Texas Gov. Rick Perry came to Murray last year and said he didn’t “worry about” Kentucky.

“I can promise you: I get up every morning and I’m nervous about what (Gov.) Bobby Jindal’s doing in Louisiana, and I know for a fact that Rick Scott’s over there in Florida looking at his tax code, his regulatory code; he’s trying to pass major tort reform in Florida today. It makes me nervous,” Perry said. “You think (Tennessee) Gov. Bill Haslam’s not sitting down there, kind of looking up here going ‘which of these businesses am I going to come get this time’ because he’s a right-to-work state, he doesn’t have a personal income tax.”

Neither is 1st Choice Aerospace the first company to invest in another state while citing uncompetitive policies.

Chegg, Inc., a California-based textbook rental company, announced earlier this year it was closing its Shepherdsville-based fulfillment center.

Rob Chestnut, Chegg’s general counsel, told Louisville Business First: “Kentucky’s business climate has had us very unhappy for quite some time.”

The story’s headline read: “Where will Chegg Inc. move its inventory? Anywhere but Kentucky.”

Some recent data also casts serious doubt on Kentucky’s competitiveness.

A new Truth in Accounting report indicates that our commonwealth has the nation’s fourth-highest taxpayer burden.

Frankfort owes $53 billion in bills, has $13 billion in assets, which leaves $40 billion in debt and results in a $32,600 burden for each taxpayer—up from $23,800 in 2009.

Compare that with Florida’s taxpayer burden of $1,100 or neighboring Indiana’s $700 load.

Each Tennessee taxpayer would actually receive a $1,300 surplus if the Volunteer State’s $2.4 billion surplus were divided among them.

Such economic strength is attractive to companies looking to expand.

They don’t want to arrive in a state only to be forced to bail out a public-pension system through higher taxes.

Will Fischer and his fellow politicians urge Kentucky’s business owners: “Don’t leave; trust us to fix these problems”?

How many will respond: “I don’t think so”?

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at [email protected] Read previously published columns at www.bipps.org. This column previously appeared in the Grayson County News Gazette, a Civitas Media publication.

By Jim Waters

Bluegrass Beacon

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