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Wages Of Welfare Reform
The state has been creating 150,000 to 200,000 new jobs each year, while the work force has been growing annually by about 75,000. But Florida has up to 160,000 people on the welfare rolls at any given time and processes annually nearly 450,000 applications for assistance. The situation "is fairly alarming," acknowledges Lanny Larson, president of the jobs and education partnership of Enterprise Florida, the state's new economic-development arm. The picture is even more troubling in some depressed rural areas. "You look at some communities, and there were more public assistance recipients than there were jobs created," Larson adds.
"I'm spending a lot of nights trying to figure out how the hell I'm going to get this done," admits Doug Jamerson, secretary of the Department of Labor and Employment Security. Jamerson has emerged as the Chiles administration's point person on finding jobs.
Gov. Chiles, Jamerson and other officials have fanned out across the state this fall, seeking jobs from the private sector - thousands of them. "We can't do this without the business community's help," says Jamerson, an affable but no-nonsense former education commissioner, legislator and teacher. "It's going to be a tremendous selling challenge."
Most administration officials insist they're optimistic. For starters, about 50,000 of the state's cash welfare recipients won't become job candidates because they're too young, too old, too disabled or already working. What's more, the Legislature adopted new strategies to boost jobs, like the revamped Enterprise Florida. "We have an economy that's robust enough and an economic development strategy we think will be sufficient," says Martha Larson, assistant secretary of the Department of Commerce, the agency that Enterprise Florida is replacing.
But there are doubts. Up to one-third of adults on the dole are chronic long-term recipients who lack education, skills and employment experience. They likely will be especially difficult to place. And the state's ability to help them become employable is limited. Funding for child care, for example, increased, but still does not meet the demand. As for Enterprise Florida, it's been focused since its inception in 1992 on creating high-skill, high-wage jobs, not the kind that most welfare recipients are likely to compete for. The incongruity was apparent at the September Enterprise Florida economic summit in Tampa when Chiles interrupted a discussion of attracting high-tech, high-paying companies to Florida with a pitch to the gathered business people on hiring welfare cases.
Indeed, many business people still doubt the whole concept of setting aside jobs for welfare recipients when profits are on the line. Anticipating that concern, legislators have allowed temporary-employment agencies to take on some hard-core welfare recipients, for a fee. But so far it's only a pilot program.
Kelvin Robinson, legislative director for the Florida League of Cities, says local governments are willing to do their share if they can find the money. But he argues that businesses, especially those that benefit from new tax incentives included in the 1996 welfare reform, "ought to at least be required to take some of the burden of training the ones we're putting on the streets."
The incentives in their current form don't contain such requirements. The most significant of the incentives, which offers tax breaks on electricity for manufacturers that promise to try to hire former welfare recipients, doesn't actually make businesses provide any jobs. Jamerson terms it "toothless." Moreover, some manufacturers complain that it's already too restrictive because it forces them to separately meter all their manufacturing equipment in order to qualify for the full exemption. "In our opinion, it needs a cleanup bill," says Nancy Stephens, executive director of the Florida Manufacturing and Chemical Council. In addition, the penalties for wrongly claiming the exemption include misdemeanor criminal charges. "That (provision) kind of scares us," says Jerry Dickerson, government affairs representative for Monsanto Corp. in Pensacola. Meanwhile, enterprise zones, one of the state's earliest strategies for creating jobs in economically depressed areas, appear to be having only a modest impact. The program went through a top-to-bottom revision two years ago, but the new version has been slow to catch on. "The new enterprise zones are much simpler," says Rick Marcum, a Santa Rosa County economic development official. "(But) they still have that stigma that the paperwork is not worth the benefit." One possible solution, says Jamerson: infrastructure improvements in enterprise zones that would give welfare recipients on-the-job training.
In the meantime, though, Robinson worries that "the expectations may have been a little too lofty in what we could expect in terms of jobs at the end of the tunnel. Now it's time to step back and get real."
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Phone Savings On Hold
After the Federal Communications Commission announced its rules for deregulation of local phone service last August, lots of people were predicting statewide competition by January.
Now some industry insiders say the most intense competition - and the best savings for customers - might not come for years.
The principal reason: a legal battle that's shaping up over the FCC rules between turf-conscious local exchange carriers and ambitious entrants to the local market, particularly AT&T.
"Until there's a regulatory framework for competition that is in place, you're going to see competition delayed, particularly at the residential level," says Steve Wilkerson, president of the Florida Cable Telecommunications Association. "Realistically we're talking about years rather than months before widespread competition."
Local carriers contend that AT&T won an unfair advantage in the FCC rules, which set strict pricing ranges for state regulators to use when they determine how much AT&T should pay for use of local carriers' lines, switches and other equipment. The local carriers and some smaller competitors believe the FCC's price guidelines do not represent fair compensation and would allow AT&T - with its brand-name advantage - to dominate in a fully deregulated market.
Led by GTE, they've taken steps to challenge the rules. They've been joined by several states, including Florida's Public Service Commission. AT&T warns that the delay could unfairly benefit the local exchange carriers, particularly GTE. While AT&T's entry into local service likely will be delayed by the FCC rules flap, GTE's entry into long distance already has begun.
"What they're attempting to do is shorten the time frame we'd have to compete in their market" while moving ahead in long-distance, complains Mario Martinez, AT&T's president for Florida.
GTE says it's not engaging in a stalling tactic. "Our challenge (to the FCC rules) is hopefully going to make the process go faster," says Beverly Menard, regional director for regulatory and industry affairs.
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tallahassee short take
Chiles administration analysts say the benefits of a proposed 25% cut in unemployment taxes may not be as big as you'd think. That's because businesses paying the state unemployment tax get a credit on a similar federal tax. Cut the state tax, and the federal tax goes up in some cases, they say. Supporters of the proposal by GOP gubernatorial candidate Jeb Bush, including Associated Industries of Florida, say there's a way around that objection. The Chiles administration was hoping to have its counter proposal ready this month, when legislators quit worrying about elections and start worrying about the 1997 session. "Other states have done this, and we're looking at their models and track records to see if it turned out how they hoped," says Linda Shelley, Chiles chief of staff.
Business Beat - Week of May 3rd
