Across the Nation

Starting a Business in Florida: Governor Rick Scott Rolls Out the Welcome Mat

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Should the reported ease of starting a business in Florida be a matter of raging rivalry over small-business expansion between the Sunshine State and its competitors?

When former Texas Governor Rick Perry started a national “c’mon over” tour that stopped off in New York, Illinois, Connecticut, and California, he gained praise at home and criticism elsewhere for trying to convince businesses to move to the Lone Star State. Criticisms aside, his state consistently ranks at or near the top of many lists of the best states for business.

Now it’s Florida’s turn. Like Perry, the Sunshine State’s Republican chief executive, Rick Scott, is promoting Florida as where the grass is greener.

Where Grass and Profits Are Greener

Scott isn’t the only person singing Florida’s praises. A week before Scott departed for California in April 2015 to argue his position, John Paul Orr, CEO of Creative Agency Services Team (CAST), a 148-employee Sarasota-based firm that conducts business in all 50 states, told the Herald-Tribune that if it weren’t for California’s regulations—which make it difficult to do business in that state—he could hire four more employees.

Unlike California, Florida’s government helps businesses grow instead of standing in the way, according to Orr. “It’s the greatest state to do business in.”

The Numbers Speak for Themselves

According to a 2014 Gallup survey, the economy, government regulation, and health care have all been high on the list of small-business owners’ concerns, following the need to find customers and new markets. Taxes and “government in general” are cited as concerns as well. And that’s where differences in state policies can influence corporate decision-making.

For example, after Scott arrived in Los Angeles, he spoke with the Los Angeles Times about his state’s investments in transportation and ports, claiming that Florida’s cargo piers won’t have the strikes that California has experienced.

Scott also told the paper that looking at the flow of financial assets across state lines tells the story better than anecdotes. If you examine the numbers, as reported in How Money Walks, you can follow annual adjusted gross income from 1992 to 2011. “Approximately $100 billion has moved to Florida from all over the country,” Scott told the Times. “Where does it come from? It’s come from New York; it’s come from New Jersey; and it’s come from California. California in that time frame has lost $46 billion.”

Scott notes that his state has won hundreds of competitive projects by making it easier to start a business in Florida than elsewhere. The prizes have been lucrative, including companies such as Lockheed Martin and Northrop Grumman, who decided to grow jobs in Florida.

“On top of that,” he says, “you have 250,000 people who moved to Florida last year, and a lot of those are small-business people. They’re saying, ‘I can do things better in Florida than anywhere else.’ “

Other Witnesses in Florida’s Favor

The nonpartisan Tax Foundation’s 2015 State Business Tax Climate Index rates Florida as the fifth best in the nation for business friendliness. California, in contrast, falls near the bottom of the scale at number 48.

Chief Executive, a website serving corporate leaders, rates “states that foster growth through progressive business development programs, low taxes, and a quality living environment.” Its 2015 list puts Florida at number two, just behind Texas, and drops California into the cellar at 50.

State leaders such as Scott and Perry therefore have a substantial argument that lighter regulatory burdens and lower business tax rates can really make a difference to small-business owners expanding their enterprises or starting a business in Florida.