Can Rick Scott Put Florida to Work?

By STEPHEN MOORE
OPINION Wall Street Journal
DECEMBER 31, 2010

"I'm going to run this state like a business,"
the new governor says.

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.

(Mr. Moore is senior economics writer for the
Wall Street Journal editorial page.)