Limited Government? Keep an Eye on Florida

With both the federal and state governments in the United States seemingly headed the way of Greece, Florida appears to have the best prospects among the states for limited government.

Florida already is among the lowest in per capita state government spending, and in state government employees per capita. and is one of the few states without a personal income tax.

The recession has hit Florida relatively hard. The state has 12% unemployment, well above the national average, and the real estate collapse hit Florida harder than most states too. But the legislature responded by cutting the state budget. Four years ago total state appropriations topped $74 billion. Appropriations fell as low as $66 billion during the recession, and are $70.5 billion this year.

Unlike some states, when revenues declined, the legislature cut expenditures to match, and opposed tax increases. If you like limited government, Florida looks pretty good already. But, things may look even better.

Florida inaugurated a new governor January 4: Rick Scott. Governor Scott’s background is in the health care business, where he made a fortune, and used more than $70 million of his own money to finance his campaign. He doesn’t owe big political favors to campaign contributors. He says he wants to “run government like a business” (whatever that means), has proposed additional tax cuts, including eliminating the state’s corporate income tax, he wants to cut prison spending by reducing the prison population, he wants to eliminate regulations that stand in the way of business activity. He wants Florida to have a smaller government and a business-friendly climate. (The weather is already pretty good.)

It would appear that Governor Scott should not find much resistance in the state legislature, which is heavily Republican, and with both Houses headed by fiscally conservative leaders. Senate President Mike Haridopolos unsuccessfully tried last year, before he was president, to place a constitutional tax and expenditure limitation on the ballot. He’ll have more power this year, and has stated his intentions to try again. Both Haridopolos and House Speaker Dean Cannon are committed to limiting a state government that is already lean by national standards.

To summarize, my arguments that Florida has as good a chance to reign in state government spending, taxation, and regulation as any state are that (1) it is already a small government state by national standards, and (2) the incoming governor and legislature have a sincere commitment to further limiting the scope and power of the state.

Because conditions are so favorable for limiting state government in Florida, the state bears watching.

If, a few years down the road, we see a more limited government in Florida, that points to the possibility that it could happen in other states. That possibility must be tempered by the realization that few states will have a political alignment that is as favorable toward limited governemnt as Florida’s is now.

If, a few years down the road, we see politics as usual in Florida, and state policies are directed more by lobbyists, interest groups, and politicians trying to buy political support in future elections, that would be a sign that there’s not much of a chance for limiting the power of government anywhere.

Keep an eye on Florida.

Randall G. Holcombe is a Senior Fellow at the Independent Institute, the DeVoe Moore Professor of Economics at Florida State University, and author of the Independent Institute book Liberty in Peril: Democracy and Power in American History.
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