PART ONE IN A SERIES    

Sometimes, the prosperity of Florida’s businesses, and their ability to create jobs that improve the quality of life in Florida’s communities, depends heavily on the actions of government.

The state legislature can do a lot of things to help or hurt the ability of business to create jobs. For that reason, it’s important for legislators to know what our priorities are, so we can remain healthy enough to continue to be the engine that drives job creation.

Here’s what business needs in 2011:

ALLOW BUSINESS TO CREATE JOBS:

1. •  Jobs are the Top Priority: To create jobs, we need the help of the legislature: business needs to stop paying as much in taxes, so we can use that money to expand our sales forces and to hire people. A reduction of Florida’s corporate income tax, from 5.5% to 3%, will be a major job creator. It will also be an incentive for new companies to move here.
2. •  Capture the Internet sales tax: As a partial offset to reducing corporate taxes, the legislature needs to make a big push to enforce fair collection of internet sales taxes that are not being captured now. This is not a new tax– it’s already the law, but the law is being evaded.
3. •  Sales Tax Holidays: Business activity increases when Floridians can purchase essential supplies without paying or collecting sales tax.
4. •  Make Florida businesses competitive with neighboring states: Do this by eliminating sales taxes on purchasing manufacturing equipment. These taxes create disincentives for capital investment, which is necessary to stimulate growth

BUDGET:

1. •  Budget Deficits stifle economic upturns. John Maynard Keynes is wrong: you cannot tax your way out of a bad economy. Government must look at ways to reduce costs and increase efficiencies.
2. •  Florida’s Pension System is a budget destroyer. It must be brought more in line with the private sector by moving to defined contribution plans and away from defined benefit plans. Public employee unions are fighting the move.
3. •  Medicaid Reform is needed. Florida’s Medicaid program this year will cost $22 billion. Business is subsidizing Medicaid providers. This subsidization is disastrous to employers. Florida needs a “managed care” approach like private employers have.

UNEMPLOYMENT COMPENSATION TAXES:

Florida’s unemployment trust fund went broke in August 2009, and Florida has needed to borrow $2 billion from the feds to fund unemployment claims. In the first year after 2009, business agreed to increase taxes on ourselves. Unemployment comp appeals referees have been inconsistent in applying criteria in the claims process. Balance must be brought to this process. There is no simple solution, but here’s what’s needed:

1. •  Require the referees to follow consistent and established criteria statewide when determining employee discharges for cause.
2. •  The burden of proof for awards under the unemployment comp status must carry a neutral construction.
3. •  Benefits must be reduced or eliminated when claimants receive benefits from other sources in the same period.
4. •  Unemployed people who refuse suitable work should be prohibited from receiving benefits.

TORT REFORM:

A civil justice system that’s imbalanced stifles the ability for employers to recover from economic downturns and create jobs. A major transfer of wealth is happening now, moving business owner’s money to the pockets of trial lawyers, through the use of “bad faith” lawsuits with multiple punitive damages.

Plaintiffs who are not owed a duty by an insurer should not be allowed to file a lawsuit against the insurer. Businesses should no longer be denied a reasonable time period to cure a complaint without having to go to court. The insurer should not be held to a higher behavioral standard than the plaintiff.

Due to a Florida Supreme Court decision, juries in Florida don’t get to hear what the “other” causes of an auto accident are, such as a driver who was drinking or drug-impaired, or a road slippery from a rainstorm. Because of this, insurance costs have sky-rocketed. This needs to be corrected, and the playing field leveled.

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John R. Smith

John R. Smith is chairman of BIZPAC, the Business Political Action Committee of Palm Beach County, and owner of a financial services company. He is a frequent columnist for BizPac Review.

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