HERE COME THE GOVERNORS: STEVE MOORE ON FLORIDA’S INCOMING RICK SCOTT
By STEVE MOORE
Everyone’s talking about the incoming Republican majority in the House of Representatives, but we shouldn’t forget the 17 newly elected reformist GOP governors—from New Mexico to Ohio to Maine—who are nearly all hostile to the overweening ambitions of the federal government. Florida’s Rick Scott may emerge as one of the boldest.
As far as Washington goes, he says there’s been “enough spending and borrowing.” And as far as relations between the nation’s capital and the states are concerned, his mantra is even more blunt: “Give us our power back. Give us our money and let us run our states.”
Mr. Scott, who over the past quarter-century built a $20 billion hospital empire, Columbia-HCA, has practically zero political experience. The Florida governorship is his first elected office. But his campaign theme—”7 steps to create 700,000 jobs in 7 years”—clearly resonated with anxious voters. Florida has lost 700,000 jobs since the recession began and ranks among the top five states in terms of mortgage foreclosures. Home prices are down by 40% or more in cities like Tampa, Fort Lauderdale and Naples.
“I’m going to run this state like a business,” Mr. Scott promises. “When businesses think of locating in North America, I want to make sure that they think first about Florida.” His first executive order to jump-start the economy will be a freeze on new regulations. “We have plenty of rules already,” he says. He also wants to phase out the state corporate income tax over the next seven years, slash property taxes by 19%, and rapidly expand the state’s K-12 vouchers and charter schools so Florida parents have more educational options.
Associated Press‘Give us our power back. Give us our money and let us run our states,’ says Florida Governor-elect Rick Scott.
Florida’s budget deficit is $3.5 billion, and to deal with it Mr. Scott says that state agencies will have to justify every penny they want to spend. “We will look at every agency and ask . . . ‘What are you trying to achieve, and is there a lower-cost way to do it?’” He hopes to save $1.4 billion annually on Florida’s public-employee pensions by requiring greater worker contributions to the funds and by steering new workers into 401k retirement plans. He wants to cut Florida’s budget all the way back to its 2004 baseline.
Mr. Scott is unquestionably an expert on health-care issues, but he has come under intense attack for $1.6 billion in fraudulent Medicare and Medicaid claims submitted in the mid-1990s by Columbia Hospital Corporation, the name of Mr. Scott’s firm at the time. Mr. Scott persuaded voters that he wasn’t personally to blame, but those complaints will doubtless surface again as he tries to uproot the current health-care financing structure in the state.
Mr. Scott believes that the growing financial squeeze from programs such as Medicaid means that “there’s going to be a lot of pressure from the new governors to get Congress to block-grant the [Medicaid] money back to us.” The theory is that the states can more efficiently administer the program.
His cost-containment strategy involves creating a health-care voucher for eligible Medicaid recipients so that they can shop around for health care and explore money-saving options like high-deductible health savings accounts. “If poor people are spending their own money, it is amazing how fast they will figure out how to keep a lid on medical bills,” he says, based on his own experience in the private sector.
Critics say this will inhibit preventive care, but Mr. Scott scoffs at the claim. “If the money is yours, don’t you think you will change to a healthier lifestyle?”
Like so many of the new GOP governors, Mr. Scott thinks that states’ financial problems can be solved by applying sound business principles. A business model applied to government can certainly reduce inefficiency and improve accountability. But those trying to implement the model may crash into a wall of opposition from the permanent bureaucracy and government unions. Mr. Scott sounds more than a little naive when I ask about how hard he thinks it will be to impose alien money-saving concepts on the fifth-largest state government in America.
For those who doubt the wisdom of his strategy to downsize government, he carries around a chart which shows, fairly persuasively, that over the past 30 years Florida has prospered when government spending was low and floundered when it was high. If he’s right about this—and if he can deliver on the changes he wants—then those 700,000 new jobs may be on their way. And don’t be surprised if this plan turns Florida’s real-estate bust into another boom.
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