The future of Florida, Inc.: Gov. Rick Scott’s policy agenda
Today Rick Scott will become the chief executive of Florida.
The former health care CEO has said he plans to bring his boardroom experience to bear on state government, which he intends to remake “from scratch.” But already, there are questions about whether he will adopt all the ideas his advisers have presented, and whether some of them will pass muster under the state constitution or win necessary approval from the federal government.
And while he may find friends in a legislature dominated by fellow Republicans, some lawmakers are already signaling that Scott may not always have his way.
The Miami Herald reports:
“Some of these sound like common-sense ideas and others are going back to the past where things didn’t work,” said Sen. Paula Dockery, a Lakeland Republican and one of two legislators who are among Scott’s main advisors on the team. “After a thorough debate, the Legislature will view some of them positively but will view some of them with great caution.”
Scott said in a recent interview with the Sarasota Herald-Tribune that he’s still weighing the recommendations of his transition team — recommendations he says aren’t binding, but will be taken seriously — and that his agenda is likely to emerge in the coming weeks.
As he refines his proposals, what follows is an issue-by-issue look about what we know about his agenda, based on what he’s said himself and what his advisers have suggested.
Scott’s transition team called for “re-branding” and consolidating state regulatory agencies. His advisers on regulatory reform recommended merging the state’s Departments of Environmental Protection, Transportation and Community Affairs into one Department of Growth Leadership.
One slide created by Scott’s transition team suggests that state regulators’ mission has creeped from “protection” of the environment to “suppression” of growth. The primary aim of the new department should shift from stopping bad development to helping “make good development happen.”
But what is “good development”? And have regulators have obstructed it? Tom Pelham, the outgoing head of the DCA, recently argued that critics, including Scott, “have vilified the Department of Community Affairs — the state’s invaluable growth management arm — as a prelude to dismantling it”:
They rail about how the department’s become an unwieldy, impervious impediment to “good growth” and the jobs that come with it. But the men and women at DCA who review the amendments to local growth plans hatched by developers number all of 58.
They do what they do — checking whether housing communities or industrial parks adhere to local and state rules — because Florida’s lawmakers placed that responsibility squarely on their shoulders. Critics like House Speaker Dean Cannon and Senate President Mike Haridopolos voted for bills that require local growth plans to address energy efficiency and the stress that developments place on water resources, transportation and schools.
Scott’s transition advisers didn’t see it that way, as the St. Petersburg Times reports:
“You go into the agencies and it’s almost like you’re the enemy,” complained Doug Manson, a Tampa lawyer who has represented utilities and bottled water companies, and who chaired the environmental subcommittee of the regulatory reform group. He said the regulators’ attitude is, “How do we suppress or stop development?”
[1000 Friends of Florida president Charles] Pattison said having a growth management agency still is important, but he added that a consolidated agency could work with the right leadership.
“You are going to have somebody who believes in the growth management mission — that there is a state oversight role,” he said. “And with that function and role comes the same authority to say ‘no’ from time to time.”
Scott’s economic development advisers lamented that many agencies “are not tasked with being job creators” and “often are obstructions,” but his ideas go beyond curbing state regulations.
During the campaign he pledged to reduce the cost of doing business by phasing out the corporate income tax and lowering business utility rates (which could lead to higher residential rates).
His advisers have recommended he should:
- Use the state’s university system as an economic development engine, increasing the number of business incubators like those at the University of Florida and the University of Central Florida.
- Expand statewide the model of the Florida High Tech Corridor Council.
- Increase state funding for Visit Florida, the state’s tourism-promotion agency, to $62.5 million (more than double its current total).
- Make Florida’s ports accessible to the larger container ships expected to start coming through the expanded Panama Canal.
Scott has appointed economic development adviser Herschel Vinyard, a shipbuilding executive and Jacksonville Port Authority board member, to head the Department of Environmental Protection.
Jobs and Unemployment
Perhaps the most prominent of Scott’s campaign promises was to create 700,000 jobs over seven years.
His economic development transition team recommends that he also look for ways to reduce the burdens of the state’s unemployment compensation system.
The advisers took flak for misreading a study, which they used to suggest the unemployed are not looking hard enough to find work. Their report contends that the amount of time people spend unemployed has increased, while at the same time, the number of unfilled private sector jobs has risen.
Florida has “no system to require and track active job search” for people receiving benefits, the report notes. The state should connect unemployment compensation and workforce development data, so it can track whether people who seek benefits have already started looking for work.
“Failure to comply with job search requirements = no more benefits,” says one of the slides. The same slide also suggests creating a “subsidized employment program to stimulate job creation.”
In the model presented by Scott’s advisers, parents should be given the rights of customers (able to shop around and select schools for their children) and shareholders (with access to mandatory financial disclosures and rights to vote to restructure failing public schools).
Education was one area where the Scott campaign released a detailed policy plan (.pdf):
As part of my plan, I want to offer parents a menu of options for their children, including but not limited to charter schools, private schools, homeschooling and virtual schools. I want to create an education program that will allow parents to get creative in how to meet the distinctive needs of their children. I do not believe every child should be forced into just one method of being educated if that method is not working.
His transition advisers went on to recommend offering “education savings accounts” for every public school student, which could be spent on private schools, virtual schools or other education-related expenses.
The “universal vouchers” idea may not pass muster under the state’s constitution (one voucher supporter worries his plan could threaten the state’s existing school-choice program), so it may take a constitutional amendment to make the plan viable. The transition document suggests Scott examine whether the provision that derailed a voucher proposal under Jeb Bush “is still appropriate for the changing environment of the 21st century.”
The crux of Scott’s transition advice involves moving from “tough on crime” to “right on crime” (which is also the name of a new conservative group aimed at curbing corrections spending) with policies that will save money by reducing the number of prisoners while reducing crime in the long run. That means expanding job training, work-release programs, drug treatment and mental health counseling, and taking steps to help released prisoners find jobs and return to normal life.
These ideas have been outlined in reports (.pdf) by the business-backed policy group Florida Tax Watch, along with measures to scrutinize the Department of Corrections (which Scott’s advisers panned for its inefficiency) in an effort to find greater savings in coming years. Scott has yet to indicate which of these ideas he favors or when or how they’ll be implemented. But they do align with his goal to save $1 billion in prison spending over seven years.
His advisers’ recommendations for juvenile justice follow a similar pattern: By focusing on helping so-called “at-risk” young people, rather than simply punishing them, the state could “save kids while saving money.”
To that end, Scott has appointed Wansley Walters to be the first female head the state’s Department of Juvenile Justice. Her efforts as the head of Juvenile Services in Miami-Dade County “have served as national models” and “been recognized by the White House,” according to the Associated Press:
In the past 10 years, Walters has saved the county $33 million while reducing juvenile arrests by 51 percent, re-arrests by 80 percent and juvenile detention by 66 percent, Scott said.
Walters’ screening and assessment programs help keep more young offenders out of juvenile detention, and implementing her system statewide will save taxpayer money, said Cathy Craig-Myers, executive director of the Florida Juvenile Justice Association.
The Florida Police Benevolent Association, which attacked Scott’s prison plans during the campaign, acknowledges that efforts to reduce recidivism fall in line with the mission of the corrections officers it represents, says union spokesman Matt Puckett.
But sticking points could still arise in other areas. Scott said during the campaign that he’s interested in “paying competitive, market-based salaries” for prison workers, and the Police Benevolent Association’s labor agreement expires next year. Puckett raises the question: What private sector employee is “comparable” to a prison guard, other than a private prison employee?
Communications Director Brian Burgess told the News Service of Florida that “privatization isn’t necessary for us to achieve that goal, but nothing is off the table while we are still in the review and planning phase.” The transition team also pointed to other perceived problems with the union’s current contract, saying that, for example, that it favors seniority over merit.
Dave Weigel, a chronicler of the conservative movement, recently described Scott, who emerged on the political scene backing groups opposing health care reform, as “the first politician who can credit his career to the anti-Affordable Care Act backlash.”
As Republicans in Washington fight for repeal, Scott is expected to push the conservative line on health care at the state level. He tapped Alan Levine, a veteran of the Jeb Bush Administration, to lead his health care transition advisers. Health News Florida sums up their recommendations:
County health departments? They should be a “last resort” for providing primary care to residents.
Public hospitals? Maybe not needed.
Three state mental hospitals? Private companies can do better.
Scott made a fortune running the Columbia/HCA hospital company and then founded a chain of walk-in clinics. Bottom line, he’s no stranger to the private health-care industry.
Now, judging from the 68-page transition team report, he could move state health services more in that direction. While the details of such ideas always get sticky, Scott appears to have a willing audience among business-friendly Republican legislative leaders who are worried about a gaping budget shortfall.
Levine helped craft a pilot Medicaid privatization program under Jeb Bush, which required permission from the federal government. Lawmakers are considering a statewide overhaul along similar lines, which would move patients to private managed-care providers such as HMOs, and the transition advisers call for a “strong” push to extend the existing program and receive even more flexibility from the federal government.
They also call for Scott to consider merging the Agency for Health Care Administration, the Department of Elder Affairs, the Agency for Persons with Disabilities and the Department of Health into a single agency.
Levine told the St. Petersburg Times he “wanted to be provocative” with his recommendations.
Scott has said he would like to bring the state pension system in line with private sector retirement plans (as well as those in other states) by requiring employees to contribute to their retirement accounts.
His campaign said that could save the state “almost $1.4 billion.” A recent study by Florida Tax Watch suggests reform measures along those lines that could save between $1 billion and $1.25 billion.
Scott has also warned recently that he believes Florida’s pension fund is relying on unrealistically optimistic projections, calling into question its ability to meet future obligations:
Scott’s forecast of a deeper pension funding hole contradicts the position of the State Board of Administration, which invests $148 billion for more than 1 million current and future retirees and hundreds of state and local government agencies. The SBA’s outgoing trustees — Gov. Charlie Crist, Attorney General Bill McCollum and Chief Financial Officer Alex Sink — said the pension fund was recovering from steep losses it suffered during the recession.
My concern is the return expectations [of 7.75 percent] are high. I don’t think that’s easy to do, and my concern is that if we say we’re 13 or 14 percent underfunded, but that’s assuming a 7.75 percent return, I don’t believe that’s realistic. It’s going to be difficult unless you take more risk than pension funds ought to be taking. Pension funds are for people’s retirement, and so if I was worried about my retirement, I’d be more cautious with my investing.
Although the state faces a budget shortfall that could easily exceed $3 billion, Scott said during the campaign that he would cut property taxes by 19 percent.
“Savings from other key components of my 7 step plan will be used to replace those funds so not $1 is shifted away from our schools,” his campaign literature said.
Some Republican lawmakers have already described that plan as unrealistic, likening it to campaign promises abandoned by Jeb Bush after he took office.
Running Government Like a Business
Scott has announced an intention to bring about cultural shift in state government.
Members of Scott’s team describe their ideas in MBA-speak: “rebranding” government agencies, emphasizing “return on investment” in state spending, recommending that Scott “create a high-performance culture through the implementation of balanced scorecards and data-driven management,” calling for state employees to gin up their “entrepreneurial spirit” and refering to state government as “the company.”
One of his earliest ideas from the campaign was “accountability budgeting.” According to his campaign website:
He will make each state agency set annual goals for every dollar they spend, then measure their performance against those goals and hold them accountable for their outcomes.
Not long after the election, he added during a speech to a business group:
One of the clearest lessons I have learned from my business career — and I’m sure you’ve learned from yours — is that improvement begins with measurement.
All the way back to my first business — a donut shop I bought to give my Mom a steady income — I saw the value of collecting data. It turns out that donut shops sell more donuts on cold rainy days — and knowing that, you just make more donuts in anticipation of the increased demand and reap the extra profit.
Every agency of state government needs to be measuring the variables that we have identified as goals and making improvements in response to the data.
The desire to improve the way government programs are evaluated did not start with Scott. As Ezra Klein notes in The Washington Post, advisers to President Barack Obama offered similar ideas.
Michael Greenstone, director of the Hamilton Project, remembers his time as chief economist for the president’s Council of Economic Advisers. ”
In the first year of the Obama administration,” he says, “I appointed myself to run around and argue that the stimulus was the greatest opportunity for evaluation of federal programs that’s ever happened. But the federal government is not equipped to do that. No one is against it, really, but it’s not a priority. It’s not part of the culture. And so it doesn’t have the sense of urgency that running a fit government would require.”
The problem, Greenstone continues, is that the government simply doesn’t have good data on what works and what doesn’t. But there’s a solution. “We should take one-half of 1 percent of funding for every program and use it for evaluation,” he says.
For the federal government, it’s the equivalent of stepping on the scale everyday. And if you’d resolved to lose weight and get fit, isn’t that how you’d start?
Policy makers of all political stripes have come up with ways to improve the way government works that haven’t been put into action. After today’s ceremonies, we will begin to learn which of his ideas Scott will be able to execute.