This article was published by The McAlvany Intelligence Advisor on Friday, January 29, 2016:
Rick Scott has always been an entrepreneur. While enrolled at the University of Missouri-Kansas City and working full-time at a local grocery store, Scott and his wife Ann bought two Kansas City donut shops. After getting his law degree, he went to work at a law firm specializing in the health care industry. In 1987, at age 34, he took all that they had in the bank and started Columbia Hospital Corporation. Two years later his company was merged with the Hospital Corporation of America to become Columbia/HCA.
In the next ten years it had grown to become the world’s largest private for-profit health care company with more than 340 hospitals, 135 surgery centers, and 550 home health locations in 37 states and two foreign countries. It employed more than 285,000 people, making it the seventh-largest U.S. employer and the 12th largest employer worldwide.
He resigned as CEO of the company in 1997 after it was charged with Medicare fraud and fined $600 million. Scott was not implicated in the scandal and no charges were filed against him.
He then became a venture capitalist, investing in high-risk but potentially highly-profitable companies, applying what he learned while running Columbia/HCA.
In 2009 he founded Conservatives for Patients’ Rights as an answer to the health care scheme then gathering momentum in Washington. Based on free-market principles, it espoused “choice, competition, accountability, and personal responsibility.”
In 2010 he saw his opportunity to run for the governorship of Florida in hopes that what he had learned in the free market might apply successfully to the state’s awful financial position. He assumed office in January 2011 and immediately began to cut taxes, cut spending, and cut regulations.
Under the previous administration the state had lost some 900,000 jobs, had an unemployment rate over 11 percent, and had run up more than $5 billion in debt. Scott increased the state’s exemption level for corporate taxes from $25,000 to $50,000. He expanded the state sales tax exemption for manufacturing equipment. In 2013 he approved a three-year total exemption of that sales tax. In 2014 he pushed to raise the corporate tax exemption from $50,000 to $75,000. Last year he implemented a law cutting $400 million in vehicle fees. In all, over the past five years he, with the help of a friendly legislature, has cut nearly 50 taxes.
Along the way he has cut business regulations by 15 percent, from 21,000 to 17,800, while also eliminating almost 11,000 government jobs (with another 1,000 cuts in the pipeline). In addition he reduced the number of weeks and the benefits being paid out under the state’s unemployment insurance program.
The oxygen revived the economy almost immediately. In 2013, and then again in 2014, Florida’s economy outpaced the national economy, with its growth putting it 11th in the country in 2014. The Tax Foundation ranked Florida 5th in the country in its State Business Tax Climate in 2012, 2013, and 2014 and then moved it up to 4th position in 2015.
The rebound is reflected in more than one million new jobs being added since Scott took office, passing Texas in job creation and New York in population. It’s reflected further by Bloomberg, which named 18 cities that are expected to see the most growth next year, nine of which are in Florida. It is also reflected in tax revenues to the state, which Scott projects will result in a $635 million surplus for 2016-2017.
Timothy Doescher, a research assistant for the Heritage Foundation, calls it the Florida “model,” explaining,
What is the model set by Florida? It’s simple: get government out of the way, and unleash prosperity.
Since January 2011 Florida has gained back all of the jobs it lost, plus some, surpassing those created in Texas. It also surpassed New York in population as 1,000 people every day stream into the newly revived state.
Take a state reeling from high unemployment, outrageous debt, little incentive for entrepreneurs like Scott to take risks, and employ the new free market “model” and one gets what Floridians today are now enjoying: the economic resurgence that follows when the free market is allowed to breathe.
Bloomberg.com: These 18 Cities Will See the Most Economic Growth Next Year
Sun-Sentinel.com: Florida’s economic growth beats U.S. average
DailySignal.com: How Florida Created 1 Million Jobs in 5 Years
Tax Foundation: 2016 State Business Tax Climate Index