Floridians usually try to sell their state by bragging about the white-sand beaches, emerald golf courses, and crystal-blue waters.
But now the state’s Republican governor is trying a new pitch, telling Massachusetts business owners to move to Florida and escape the taxes here.
The governor, Rick Scott, mailed letters this week to 100 business leaders in Massachusetts urging them to “book a one-way ticket to Florida,” now that the Commonwealth has approved higher taxes on gasoline and computer services.
“Florida’s economic formula is working – while Florida’s unemployment rate has seen the second largest drop in the country, Massachusetts’ June unemployment rate increased to the highest since November 2011,” Scott writes in the letter, a copy of which is posted on his website. “While Florida ranks fifth in the nation for our business tax climate, Massachusetts is stuck at number 22, according to the Tax Foundation. It is bound to get worse in Massachusetts, as just last week we saw them raise taxes on gasoline and even computer services.”
Scott’s letter prompted a tart response from Governor Deval Patrick’s economic development secretary, Gregory Bialecki, who argued that Massachusetts has recovered faster and stronger from the recession than the rest of the country.
“I am not surprised that other states wish they had the successful and growing innovation businesses that we have here in Massachusetts,” Bialecki said in a statement. “Under Governor Patrick’s leadership, we have committed to long-term investments in education, innovation, and infrastructure, all good news for companies doing business here. Massachusetts is creating a special environment for a 21st century innovation economy, one that thriving businesses happily call home.”
Scott has sent similar letters to business owners in Colorado, Minnesota, Illinois, California, Connecticut, New York, and Maryland. Like Massachusetts, each of those states has a Democratic governor.
Scott’s letter to Massachusetts businesses is an effort to capitalize on the $500 million in higher taxes on gasoline, tobacco, and computer and software services that recently became law. Patrick, who wanted even higher taxes, argues that the revenue will help stabilize and expand the state’s aging public transit systems, roads, and bridges.
But the computer services tax has produced a backlash among Massachusetts business leaders, some of whom said they were not surprised that Scott is trying to poach companies from the state.
“If I were the governor of Florida, I would be promoting my state to Massachusetts businesses, as well,” said Christopher R. Anderson, president of the Massachusetts High Technology Council, which is helping to spearhead a ballot question to repeal the computer tax next year. “Harvard and MIT are not going to get up and move, but high-tech companies have an extremely movable workforce.”
Michael J. Widmer — president of the Massachusetts Taxpayers Foundation, a business-backed budget watchdog group — predicted other states will follow Florida in trying to lure Massachusetts businesses.
“We’re turning our competitive advantage into a competitive disadvantage and, even if this is largely theater, it’s a preview of coming attractions,” said Widmer, whose group supports the ballot question to repeal the tax. “What this does is put a black mark on Massachusetts nationally.”
Representative Bradley H. Jones Jr., the GOP leader of the Massachusetts House, agreed.
“This just plays right into the hand of other states,” he said. “We’ve injected unpredictability into our corporate tax code and put a tax on innovation, one of the key segments of our economy.”
But opposition to Scott’s move came from the Greater Boston Chamber of Commerce, whose president and chief executive, Paul Guzzi, argued that Massachusetts boasts a highly skilled workforce, world-class universities, high-tech, and financial services firms, as well as historic sites and natural beauty.
“Governor Scott’s efforts to lure Massachusetts business owners to Florida in August strikes me as somewhat climate-challenged, in addition to being misguided,” he said.
Anderson, of the High Tech Council, also conceded that, despite the new computer tax, Massachusetts remains a desirable place to build a firm, with a highly educated workforce and growing tech clusters.
“No one can match Massachusetts’ strength in technology,” he said. “Florida can’t come close.”