Transcript: Florida's emperor has no clothes

A transcript of episode 6 of Seeking Rents — The Podcast, which initially aired on Oct. 22, 2022

This is Seeking Rents, a newsletter and podcast devoted to producing original journalism — and lifting up the journalism of others — that examines the many ways that businesses influence public policy across Florida, written by Jason Garcia. Seeking Rents is free to all. But please consider a voluntary paid subscription, if you can afford one, to help support our work.

[00:00:00] Hello and welcome to Seeking Rents — the Podcast. I'm your host, Jason Garcia, the publisher of Seeking Rents, a newsletter where we explore the ways businesses influence laws and policy in Florida.

The name Seeking Rents, by the way, comes from a term in economics called rent-seeking. And rent-seeking refers to when big businesses and wealthy folks use their money and influence to lobby for laws and policies that allow them to amass even more wealth and influence. So, for instance, say when a company lobbies for a tax break that gives it more money for doing something it's already doing. Or for a regulation that lets it pollute the environment and leaves it to everybody else to pay for the cleanup. Or rules that make it harder for smaller businesses to compete.

That's rent-seeking. And Seeking Rents is where we call it out.

This is episode six. And I'm gonna jump right into this week's topic because it's one that I feel very strongly [00:01:00] about. You know, there's a growing narrative taking root in political media, both here in Florida and nationally, that Governor Ron DeSantis is some sort of economic populist, a tough guy who stands up to the biggest corporations in the world and punches up on behalf of the little guy.

This is certainly the image that Ron DeSantis himself wants you to have of him. You can see it in the speeches he's been giving, particularly in recent months. Earlier this year, for instance, he told a crowded a small Christian college in Michigan that private companies are, quote, "not the friend of conservatives right now." He even said conservative leaders should be willing to aggressively regulate some big businesses and to stop rewarding them with things like tax cuts. And last month, during a speech at a conference in Miami, DeSantis compared himself to Ronald Reagan — except where Ronald Reagan claimed to be battling big government, Ron DeSantis claims to be battling big corporations.

Some political media [00:02:00] is starting to accept this narrative framing as fact, especially national outlets who might not be as familiar with his record in Florida, but are paying more and more attention to him because basically everybody and their mother expects Ron DeSantis to run for president in two years. The Washington Post just this week published a story about DeSantis' recent fight with Walt Disney World that had a headline that claimed DeSantis is engaged in, quote, a "war on corporate America."

Here's the thing about Ron DeSantis war on corporate America: it is a myth. It does not exist.

Listen, I've been writing about the favors companies get out of Florida government for almost two decades now.Nobody pays closer attention to this stuff than I do. This is literally why Seeking Rents exists. And I can tell you Ron DeSantis is not standing up to big corporations — at least not in any substantive ways that actually curtail corporate power [00:03:00] or help consumers, workers, or small business.

Sure, DeSantis will scowl and thump his chest and thunder around about corporations that he claims are forcing woke ideologies on their customers and workers. And sure he loves dunking on Disney in front of a crowd. But when you look past all that performance DeSantis is doing for TV cameras and pay attention to what he's actually done, here's what you'll find: he's very loudly championed a few anti-business bills that have far more style and substance to them, some of which haven't even been enforced since he signed them into law. And he's much more quietly done far more favors for businesses, including some of the richest gifts that anyone in Florida has ever given to the state's largest corporations.

Ron DeSantis growls like a tiger but governs like a kitten, at least when it comes to being tough on big business.

Allow me to prove it to you. Let's start by running through some of the bills that Ron DeSantis [00:04:00] has signed into law during his first term as governor.

In 2019, for instance, he signed a piece of legislation called House Bill 7127. It was, and this is not an exaggeration, one of the biggest corporate profits tax cuts in Florida history. This one bill cut Florida's tax on corporate profits by nearly $3 billion. That's billion with a 'B.' It included $624 million in tax refunds that the DeSantis administration mailed out just a few months ago — more than $100 million of which went to just 10 giant companies.

And here's the dirty little secret about Florida's corporate profits tax: it is so riddled with exemptions, deductions and loopholes that only the very biggest companies in the world actually pay it. 99% of businesses in Florida don't pay this tax at all. And the 1% of giants that do, pay [00:05:00] far less than they should.

What this means is that these $3 billion in tax cuts went only to a small handful of giant corporations. Small businesses did not save a dime.

Then there are all the special interest tax breaks that DeSantis has handed out to individual companies and industries. For instance, he signed off on tax breaks for Disney, Florida Power and Light, and the owner of the Miami Dolphins. I've got a list of 10 of them. I'll put it in the show notes.

And then there's Senate Bill 50, which is arguably the worst bill of all. This is a piece of legislation that DeSantis signed just before midnight one night in 2020. We've talked about it on this pod before, but Senate Bill 50 raised taxes on Florida consumers by more than $1 billion a year. It did this by forcing us to start paying taxes on everything we buy on Amazon and eBay and other online marketplaces. But that's not the only thing senate Bill 50 did. It [00:06:00] also took all that new money coming in and gave it all to businesses. It did that by cutting a pair of other taxes by more than $1 billion a year — taxes that are only paid by businesses.

In other words, Ron DeSantis made consumers pay $1 billion a year more in taxes, so businesses could pay $1 billion a year less in taxes.

Listen, you can make a strong case that tax policy is the most important thing a government does. This is where elected leaders decide how much money they're going to take from people, and who they're going to take that money from. And Ron DeSantis has made it crystal clear over his first four years as governor that he wants to take money from consumers and give it to businesses.

Of course, the governor tries to mislead his own supporters about this stuff. Here's one example that that just about broke my brain. I mentioned earlier that DeSantis gave a speech earlier this year to a small Christian college in Michigan. It happened in [00:07:00] February, and it was covered by a magazine called The American Conservative. During this speech, according to the magazine, DeSantis implied to the crowd that conservatives should not cut any more taxes for corporations. DeSantis said quote, "The Republican party has been very good at saying 'cut taxes for corporations.' But now corporations are getting so woke, do we really want to cut their taxes? I'm not saying raise them, but we're getting away from what the average American cares about."

DeSantis said this just a few weeks before his administration started sending out those giant corporate tax refunds.

Now let's talk about the price of electricity.

If you live in Florida, you're probably a customer of one of the state's, three big power companies: Florida Power and Light, Duke Energy and Tampa Electric. And if you are, you probably noticed that your monthly electric bill went way up at the start of this year. This happened because a state agency in Tallahassee, an [00:08:00] agency run by people appointed by Ron DeSantis, gave these power companies permission to raise their prices. Florida Power and Light alone got approval to raise rates by nearly $5 billion over the next four years. Spoiler alert: rates are going up again next year, too.

Now, there was a guy in Tallahassee who might have been able to do something about this. His name was JR Kelly, and he was a longtime consumer attorney who had served in state government for years. He was the leader of an obscure but very important state agency called the Office of Public Counsel. It's kind of like the law firm that represents the public when power companies try to raise electricity rates. JR Kelly had a long history of fighting back against these big power companies when they got too greedy.

And it's a sure bet that he would've fought hard against these latest rate hikes, too — except Ron DeSantis essentially fired him beforehand. He did it by signing a [00:09:00] piece of legislation in 2020 called House Bill 1095. This bill forced Kelly to resign as the head of the Office of Public Council. He would not have stepped down if Ron DeSantis hadn't signed this bill. Oh, and by the way, as soon as Kelly left, well, that's when FPL came looking for that $5 billion rate hike.

I could keep going through bills that Ron DeSantis has signed as governor that were gifts to big corporations. There was a bill that protected big sugar companies from public health lawsuits. There's a bill that exempted the agriculture industry from using the E-Verify immigration system.

But let's just talk about one more for now. It involves the city of Key West, the funky tourist town at the bottom of Florida. During the 2020 elections, voters in Key West passed a set of local referendums designed to stop giant cruise ships from docking in the city. Now, Key West is a tiny town on a [00:10:00] barrier island next to some incredibly delicate coral reef. Even if you don't live there, you can probably understand why folks who do may not want environmentally destructive mega ships carrying thousands of people showing up all the time.

But just a few months after Key West approved these referendums, DeSantis overturned them, and allowed giant cruise ships to continue sailing into this small island. DeSantis did it by signing a piece of legislation known as Senate Bill 1194. And he did it just weeks after a donor — a donor who just happens to own a pier in Key West where cruise ships dock — gave DeSantis nearly $1 million.

Now, the governor has vetoed a couple of bills that were important to some big influential businesses. For instance, earlier this year, he blocked a bill that Florida Power and Light really wanted that would've undercut the rooftop solar industry. And he killed a bill that would've given Big Sugar a leg up in the battle for fresh [00:11:00] water. That's great. I wish we'd see more of this in non-election years. But the reality is that Ron DeSantis has signed far more corporate favors into law.

Okay, so those are some of the gifts that Ron Desant has given to big companies. But what about the tough stuff? The bills in which the governor has, at least in theory, pushed back against corporate power?

Let's look at one big example in particular, one that Ron DeSantis himself loves to talk about: his so-called crackdown on social media Companies like Twitter and Facebook — companies that DeSantis claims are run by "Big Tech oligarchs" and are colluding with "the government regime" to censor conservative voices. This has been a favorite cause on the far right ever since Twitter, Facebook, and others suspended donald Trump's accounts for inciting violence after the 2020 elections.

What DeSantis is referring to when he talks about standing up to Big Tech is a bill he signed in 2021, known as Senate Bill 7072. That bill was designed to stop [00:12:00] social media companies from deleting posts or suspending users who break their rules about things like hate speech. And it would've worked by exposing those tech companies to the threat of private lawsuits and public investigations if they were found to be censoring users.

Here's the thing about that law: that de-platforming piece of it has never been enforce. One month after DeSantis signed it, a federal judge blocked the law from taking effect because he ruled that it probably violated the First Amendment of the US Constitution. An appellate court upheld that injunction earlier this year. The opinion declaring the censorship stuff unconstitutional was written by a judge appointed by Donald Trump. It's now been more than a year since DeSantis' tech censorship bill was passed, and all it has done is make money for a bunch of lawyers.

This is a common theme with DeSantis' allegedly anti-corporate bills, by the way. They have a habit of not actually doing anything. You might remember DeSantis' [00:13:00] Stop WOKE Act, which he signed earlier this year. It included restrictions on the way companies can talk to their employees about issues like diversity and racism. Yeah, a court blocked that stuff, too.

Part of the problem is that these bills are often more about public relations than serious policy. Here's an example of what I mean by that. It involves that same tech censorship bill that DeSantis loves to boast about. Right before this bill passed — and I mean literally hours before it passed — it was rewritten. Specifically, the bill was changed so that these new regulations on social media companies would not apply to any company that also owns a theme park.

This is every bit as nonsensical as it sounds. Basically the bill was changed to say that Facebook can't censor people unless it also happens to buy SeaWorld — in which case then, yeah, sure, Facebook can censor people.

I'm sure you can guess where this came from: Disney. It turns out that Disney was worried it might get [00:14:00] swept up by these new censorship regulations. So Disney's lobbyists got the legislature to add that last-minute carveout for companies that own theme parks.

But guess who helped Disney get this silly amendment passed? Ron DeSantis. Emails obtained through public records requests show the governor's staff worked hand in hand with Disney lobbyists to find a way to get Disney carved out of this law. I've got the emails. I have published them.

Now, look, maybe you think, so what? It's not like Disney was suspending Donald Trump's Disney Plus account. Who cares if Disney got carved out of a bill that was entirely about punishing Twitter and Facebook? But guess what? This stuff actually matters. Passing laws isn't a game. You have to be serious and thoughtful about it. And you can't just irrationally discriminate for one person over another. There's a whole clause in the US Constitution about this. Ron DeSantis and his staff know this. And yet they were still willing to give Disney this absurd [00:15:00] exemption — even though by doing so, they made it far more likely that this entire law would get thrown out by the court.

I should note that Ron DeSantis got the Legislature to repeal this Disney carveout earlier this year. But he only did that after he'd been caught helping Disney get it in the first place. This is the sort of thing you should probably remember when you read that DeSantis is stalling on releasing public records to reporters. There's a pretty good chance that means he's trying to hide something embarrassing.

This also brings us back to Disney. Because that's really what underpins this entire narrative that Ron DeSantis is somehow tough on big companies.

I'm sure you know the backstory here, but Ron DeSantis got into a big public fight with Disney earlier this year after the company spoke out against DeSantis' infamous "Don't Say Gay" law. So DeSantis browbeat the Florida Legislature into passing a bill that could eliminate Disney's personal government in central Florida. And he's been gloating about it on the campaign trail ever since. [00:16:00]

Listen, there is a part of me that's enjoyed watching this. Like I said earlier, I've been writing about the favors that big companies get out of the Florida Legislature for nearly 20 years. And nobody has gotten more from Tallahassee than Disney, which, at least until recently, spent millions of dollars a year on campaign contributions and employs an entire army of lobbyists in the state Capitol.

But here's the thing: Disney has gotten a bunch of stuff from Ron DeSantis, too. Here's just a few examples: DeSantis signed a $5 million a year tax break that was literally written by a Disney lobbyist. He signed a law making it easier for Disney to get rid of all the stuff that tourists leave behind at its parks. He gave Disney's government a carveout from certain road- construction rules that other local governments have to abide by. He approved half a million dollars in taxpayer money for a sporting event on Disney property. And his administration signed off on a massive corporate tax break for Disney through a state incentive program. That one tax [00:17:00] break could be worth more than half a billion dollars in savings for Disney.

Look, some of these things aren't even bad. Who the heck cares if Disney doesn't have to hang on to lost and found stuff for quite as long as it used to? But the point is they're all favors, and they show that when Disney has a problem, Ron DeSantis has, at least until recently, been happy to solve it for them.

Unlike, say, unemployed Floridians who are still forced to get by on some of the cheapest unemployment benefits in the country — all so businesses can pay some of the lowest unemployment taxes in the country.

Now, all that said, there is no question that DeSantis' relationship with Disney changed earlier this year after the "Don't Say Gay fiasco. After that, DeSantis signed that bill I mentioned earlier that could eliminate Disney's personal government in Orlando, which is called the Reedy Creek Improvement District. This is genuinely substantive. And setting [00:18:00] aside why DeSantis did it, I personally think eliminating Reedy Creek is the right thing to do. No private company should have its own personal government — although we should probably be having this as part of a larger conversation about things like community development districts for developers, too.

But it's also still an open question whether DeSantis will carry this ball all the way to the end zone. Because while the governor doesn't mention this part much, that bill he signed doesn't actually eliminate Reedy Creek until June of next year. And we're already seeing stories surface claiming that all that's really going to happen are a few cosmetic changes, like taking away Reedy Creek's power to approve a nuclear power plant — which, by the way, is something that Reedy Creek can't do on its own anyway. And if we really do unwind Reedy Creek, it's going to take some serious and thoughtful policymaking to do it in a way that doesn't cause more problems than it solves, like imposing higher costs on local taxpayers. To be clear, it can [00:19:00] be done. But DeSantis sure hasn't spelled out a plan to do it yet.

And look, If Ron DeSantis really wanted to get tough on Disney — and other big corporations that he thinks have been infected by a woke mind virus — there is a very easy way to do it. It's simple. It's substantive. And it would do a lot of good for a lot of people. Close the loopholes in Florida's corporate profits tax — the loopholes that global companies like Disney are exploiting to avoid millions of dollars a year in taxes that the rest of us are then forced to make up.

All DeSantis has to do is champion a policy called "combined reporting," which is something most other states already do.

Maybe you don't want take my word for this. But how about Matt Gaetz, the Donald Trump-defending, Ron DeSantis-loving Republican congressman from the Panhandle? Before he moved up to Washington Gaetz served in the state House, where he chaired the tax committee. And Gaetz says Disney was one of the [00:20:00] companies that lobbied the hardest to block combined reporting. In a recent column for my old newspaper, the Orlando Sentinel, Gaetz wrote that "Disney was among the companies that most utilized this tax loophole to screw the people of Florida." Gaetz urged DeSantis and other Florida leaders to close this loophole. He added, "Combined reporting is hardly a tool of liberals. Even Texas made the obvious change to protect the pocketbooks of its own citizens."

But of course, Ron DeSantis, the guy we're supposed to believe is waging war on corporate America, hasn't lifted a finger about this.

We're going to talk more about corporate tax loopholes and combined reporting in a future episode. But until then, I would suggest to you that any Florida politician — Republican or Democrat — who claims to be tough on big corporations but won't support combined reporting, is either a liar or a fool. Or maybe they just think you're [00:21:00] the fool.

Okay, that's our show for this week. Apologies for the lengthy delay between episodes, but hopefully we'll be back on a more regular schedule now. As always, if you've got any thoughts or reactions to this show or any other, or you just want to suggest topics for future episodes, my email address and Twitter handle will be in the show notes.

Remember, early voting is about to begin across Florida. Vote. And make sure everyone you know votes, too.

It is the only way we're going to put a stop to rent-seeking.

Thanks for listening, everybody. See you soon.