Florida Governor Ron DeSantis has entered the presidential race, presenting himself as a conservative culture warrior and an exceptionally competent chief executive. That he’s become a culture warrior, however insincere his motivations, is a plain fact. But DeSantis’ story of gubernatorial competence is a Disney-esque fairy tale.
He brags about leading the nation among big states in economic growth but leaves out that it’s one of the worst—perhaps the worst—states for inflation.
He points to Florida’s number one ranking in population growth, skipping over that (as I’ve written before) the state’s growth rate on his watch is no different than his predecessor’s.
He crows about putting “points on the board” by racking up legislative wins. Sure, he’s aggressively exploited the vast Republican majorities in Florida’s statehouse. But mere enactment is not competence. The more pertinent question is whether DeSantis has shown the foresight to use those majorities to craft good legislation that helps his state prosper. Or did he use them to pass legislation that looks good to Republican presidential primary voters but will backfire on Florida voters?
One example has already received plenty of attention: the law that took from Disney—the largest single-site employer in Florida—control of the local governing district that encompasses Walt Disney World Resort, the most visited theme park in the world. The global, iconic company, which celebrates its centennial this year, had the temerity to express opposition to the DeSantis law effectively banning discussion of sexual orientation and gender identity in classrooms from kindergarten to third grade. So, DeSantis, who got married at Disney World, exacted revenge.
The 44-year-old governor was so proud of his retribution that “The Magic Kingdom of Woke Corporatism” is a chapter in his bestselling campaign book. But DeSantis was sloppy. In February, Disney signed a contract with the outgoing local government to preserve its powers, and a hapless DeSantis didn’t realize he’d been had for weeks. The new board, all gubernatorial appointees, nullified the contract in April. But Disney sued DeSantis in response and canceled a planned $1 billion office complex and relocation of 2000 employees to Florida. If Mickey Mouse can give DeSantis the runaround, Republicans may ask, how will he do against Xi Jinping?
At a time when states vigorously compete for corporate investment, blowing this much, risking more, and not even succeeding at your original aim is flatfooted at best.
One of DeSantis’ seeming successes is actually a big screw-up: his $1.1 billion tax cut enacted in May 2022.
What’s so bad about tax cuts? After all, they are standard Republican fare and usually popular. And the way DeSantis structured the bill was politically clever. Florida has no individual income tax, so he reduced the sales tax on middle-class items, including diapers, kids’ clothes, books, gas, “Energy Star”-certified appliances, hurricane-resistant windows and doors, and contractor tools. The governor’s office sold it as “the largest middle-class tax relief package in the history of the state.”
The package certainly was clever enough to help DeSantis win re-election last November. Every cut I cited above was temporary, some of which were one-time tax “holidays” timed just before the election—such as the October-only gas tax holiday. (Fun fact: The gas tax holiday tab was covered by Joe Biden’s American Rescue Plan Act.)
But the package also included some permanent tax cuts not made with the middle class in mind. The Tallahassee Democrat reported the “tax cut package also included favors for businesses, who often double as campaign donors. A sales tax exemption on tickets to the Daytona 500, valued at $6 million, is included, along with $5.8 million on tickets to Formula One Grand Prix races, with a $7.5 million aquaculture break that could largely go to one company, Atlantic Sapphire, which is salmon-farming near Miami. A $300,000 exemption on green hydrogen machinery and equipment is likely to mostly help Florida Power & Light.” A NASCAR lobbyist literally wrote the Daytona 500 provision, which is not expected to help ticket buyers; NASCAR can still raise prices and pocket what would have gone to the state in sales tax revenue.
Even worse, DeSantis’s tax cuts goosed the state economy amid high inflation. In fact, DeSantis sold the tax package as an antidote “against inflationary policies imposed on us by the Biden administration.” But depending on overall economic conditions, tax cuts can fuel inflation, just like government spending—both pump more money into the economy and people’s pockets, making it easier for businesses to set higher prices.
Guess what happened? As of today, two of the five worst American metro areas for inflation are in Florida: Miami and Tampa. (Note that the federal Bureau of Labor Statistics does not publish state inflation data. The primary inflation metric economists track is the Consumer Price Index for All Urban Consumers, which BLS tracks on a citywide, not statewide, basis.)
Nationally since June, the year-to-year inflation rate has been slashed nearly in half, from 9.1 to 4.9 percent. But it’s only gone down from 10.1 to 9 percent in Miami. In Tampa (from May 2022 to March 2023), it’s 11.3 to 7.7 percent. That’s way above the national average.
Despite stubborn inflation, DeSantis is poised to sign another $1.3 billion tax cut bill, with more temporary breaks and some permanent extensions, such as for diapers and other baby products. As with car race tickets, such breaks only pay off for consumers if retailers don’t offset the tax cuts with higher prices.
Short-term politics, not long-term prosperity, is the throughline of the DeSantis record.
He banned nearly all abortions by signing a six-week ban. He gratuitously attacked the very successful New College (see the Washington Monthly’s Aalia Thomas‘s investigation) and carpet bombed diversity initiatives on all state campuses. He expanded his initial so-called “Don’t Say Gay” kindergarten-to-third-grade classroom restrictions through high school. This enthralls right-wing Republican primary voters but sets off a brain drain as young talent flees Florida for more tolerant terrain. And if Florida’s workforce shrinks while old retirees keep pouring in, that’s a recipe for a tight labor market and more inflation.
Last year, you probably heard when DeSantis duped 48 Venezuelans seeking asylum in Texas into boarding a plane bound for Massachusetts, promising them jobs and financial aid, then dumping them without advance notice to the state’s Republican governor or anyone else at a Martha’s Vineyard community center. (Most of the migrants had “humanitarian parole” status, meaning the people DeSantis hijacked were not even undocumented.) As with Disney, this stunt has led to a lawsuit that Florida taxpayers must pay to defend.
An undeterred DeSantis is planning more flights from Texas after the Florida legislature approved an additional $12 million for the legally dubious program this month. (The original flights were paid for with interest earned from federal COVID-19 relief funds, prompting a federal probe.) But other aspects of the anti-immigrant bill may exact a far greater toll on the Florida economy.
The bill requires Florida employers with at least 25 employees to use the E-Verify system to check the immigration status of new hires, orders hospitals to ask patients about their immigration status and bans the undocumented from driving a vehicle even if they have a valid out-of-state license.
Keep in mind that the Florida economy is heavily reliant on immigrants. According to data compiled by the Migration Policy Institute, about a quarter of Florida’s 10 million employed workers are foreign-born, about one-eighth are non-citizens, and about 5 percent are undocumented. A 2020 analysis by the pro-immigration group FWD.us estimated that an E-Verify mandate on all employers (with no small business exemption) “would result in some 140,000 workers lost, with a net loss of 253,500 jobs in Florida, $10.66 billion in lost earnings, and $1.25 billion in lost state and local tax revenues” with “hospitality, agriculture, construction, health care, and retail industries … particularly hard-hit.”
That analysis was done before the current inflationary spike. This month, Rollins College professor of political science Julia Maskivker spoke to WUSF about the new E-Verify policy and how Florida businesses are reacting: “What is wearing [on] the business lobby … and also consumers, is that the inability to freely hire the most productive or … fitting people for the job will have repercussions on many things: taxes, the prices of things, of food, of hotel rates, of transportation services, construction supplies, all kinds of things. And we already live in a world in which inflation is a worry for many of us, so this would not necessarily help in that regard.”
Of course, there are legitimate arguments for a system like E-Verify to ensure that America’s laws are followed, and workers are not exploited. But to implement it without economic disruption requires a transition period during which the undocumented would have the opportunity to gain legal status. But the new Florida law, signed by DeSantis on May 10, goes into effect on July 1. That could shock the state economy, as could threats by some Latino truckers to boycott Florida.
Perhaps there is hope for Florida. Considering how DeSantis’s presidential campaign has been going in the run-up to yesterday’s announcement, his chances of being the Republican nominee appear slim. So maybe by next spring, DeSantis will retire his presidential ambitions, return home, and end his gubernatorial tenure on a more competent note.