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- 2011 - October - 27th -

Florida CFO Jeff Atwater

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Florida Chief Financial Officer Jeff Atwater was elected to the office in November.

A fifth-generation Floridian, he served for a decade in the Florida House and Senate, representing Broward and Palm Beach counties, and was Senate president 2008-10.

His Senate biography shows his great-grandfather was Napoleon B. Broward, who served as governor of Florida from 1905-09.

Atwater attended the University of Florida for his bachelor’s degree in finance and his MBA.

He also was a community banker, spending time with the former Jacksonville-based Barnett Banks. He was chairman, president and CEO of Barnett Bank of Broward County from 1996-98.

He met Wednesday with Daily Record reporters.

How is Florida’s bottom line?
If your perspective is that the focus should be on how is the environment for economic success in the household and for the business entrepreneur, it is really challenged. That’s where our focus needs to be. Often I’m asked that question because people are concerned about how state revenues are doing, how will the budget be next year.

The state budget will be fine. We have the power in government to make it work one way or the other. Either we make decisions that bring expenses into line with the current economic activity of the state, or we will extract more dollars from the participants in the economy to fund priorities that we believe we have to keep funding. That’s going to have a consequence on either side.

So in answering that question, I prefer to keep it on what can we be doing to create an environment for the economic success of the business owner, and the household, so that as they’re prospering, we’re providing great education, we’re providing infrastructure needs and those things.

At the moment it’s very challenged on that front. We still have a high unemployment number, not only comparative nationally, but to anything historical that we’ve experienced for this prolonged period of time for Florida.

That is the reality of looking at ourselves being in the midst of this international recession.

What are our strengths? For so long being in growth mode, with national and international strength and prosperity, people chose to come for their conventions. They chose to come and look at a second home. They chose to pick the right year to retire, and then come here. That being our historical strength, we’re seeing that in times of international recession, that’s not something that’s going to press on.

Then it comes to, how do we be sure that the next cycle is not so severe in Florida? What do we do now?

That’s how I focus my time.

The budget will be balanced. Constitutionally, we have to do it.

We have solid reserves. We have made the difficult decisions to bring spending back to what it was without increasing new revenues.

The credit markets have put us in that very top tier category of AAA rating, where only 12 other states reside. So the state that was hit the worst, the state that still holds the highest unemployment, the highest foreclosures, defaults, most number of homes underwater in their mortgages, how does that state hold that bond rating when the country is being downgraded?

There’s been solid fiscal discipline. Our energy must be on creating an environment for diversity and greater success.

The state is facing a $1.6 billion budget deficit?
Yes. Again, it’s a reflection of the more significant story that after 2006,’07,’08,’09,’10, and now looking ahead to ‘11, that the suggestion that somehow the recession ended and we’ve turned a corner — I don’t know how you validate something of that nature in a state that has been so growth-dependent.

We can see that it will be another year in Tallahassee of looking for greater levels of efficiency and a re-prioritization yet again. What can we, this year, hold aside, set aside and not invest in, that will not be harmful to the long-term prosperity of our state?

That’s the exercise that we will have to go through again in Tallahassee, and we will find it again.

We will conclude the session when they balance the budget with, I suspect, no new revenues, keeping the money in the marketplace, allowing families and businesses to invest, and finding those places to reduce spending. And wind it up again and press on again.

That’s the present situation that we’re in. That’s the reflection again that the marketplace is still struggling.

Where do you see that coming from at this point?
We experienced from 1975-’85, 1985-’95, 1995-2005, a 3 percent growth rate, and you’re talking of building upon 10 million, 11 million, 12 million people. I think in 2004,’05, we grew by 450,000 citizens.

Today, we’re probably running just below a 1 percent growth rate.

The effort it’s going to take to absorb the existing housing stock, for us to be able to find an equilibrium in our residential marketplace, and to begin to see enough consumer confidence to where small business shops can begin to absorb some of the commercial real estate vacancies that exist so that new construction can begin again, that’s the period we’re in now.

The free-fall vacancies have ceased. We have seen a slight uptick in price points of single-family residential homes, and we have seen some stabilization in vacancies in commercial properties.

At this point, what can we be doing now to help that economic engine of our state, the confidence of Floridians, notwithstanding the national or international picture, which is significant, be able to press onward now?

That’s our focus now.

What do you see for education spending?
That’s a big issue.

That’s an important conversation every year. Anyone who would dismiss the conversation of education spending as ‘these are just difficult times’ or that ‘it’s pretty close to the prior year,’ I think that would miss out on the anxieties of both sides of this conversation.

It is real. The quality education of our youth and those retooling themselves will set the bar for the ability of our society to advance with prosperity. It will determine whether Florida can diversify its economy and attract the kind of intellectual and financial capital to place itself as a growth state that has something extraordinary to offer the country.

It’s a very, very important conversation. What we’re realizing in this moment is that we have to take a healthy and broad look at this.

One, our traditional and historically valuable institutions of our public school system have much to offer and are the only opportunity for so much of our society that we cannot diminish the quality of that experience.

How do we find greater efficiencies in administration, how do we find greater partnership supports with universities, how do we advance a reform-minded trade school experience for those that won’t be advancing on that will assure students build rich skills, and strong skills, and advance in a profession that they are excited and eager to take on?

Then there is the discussion as to what could we be doing to be sure that the focus is on the quality of the experience, and not just the dollars.

You’re looking at being sure that Floridians have a broad spectrum of opportunities and that they’re made available so that households, parents, can make choices that they believe are best for them, and there is an environment for them to succeed: Home-schooling. Charter schooling. Virtual schooling. Performance within our public school system.

It’s been very clear that Florida now ranks as one of the most innovative states in the country, while being challenged in real economic terms, in the historical contributions on student funding on the traditional, very important public school system.

I think this is very exciting for what will lend itself to healthy options for parents in Florida for years to come, and they will choose pathways that they can see are the most enriching for their child’s learning experience.

Florida’s economy historically has depended on tourism, development and agriculture. Where do we go from there?
One of the things about this moment is to first, continue to recognize the great values that each of those legs of the stool continue to have and will continue to have in Florida for a long time.

Look at the miles of coastline and the infrastructure of great assets, such as Disney and the like, and Florida will long be a place where not only Americans but international visitors will come to find respite and enjoy, and hold conventions.

Agriculture I think will continue to be part of a rich history. It will continue to find stresses in the fact that we in America established certain standards of environmental protection and quality of product. Other places in the world are trying to grow a grapefruit or an orange, so it has grown far more competitive for farmers in Florida. They’re competing internationally on the cost to get that same fruit to market.

I believe if there’s anything we should have learned in this prolonged international recession is that we must diversify our economy, and that’s not something we can turn on dime.

With a thoughtful and conscientious commitment of resources, we should be looking at what will that economy for Florida look like.

Why would we not consider looking at what the growth industries will be in the next 50 years, the next 100 years?
We already have great markers in the ground in tourism and agriculture and a construction-talented workforce.

It seems to be quite clear that life sciences, energy and technology are going to be the industries that will attract the great human intellectual capital. And we have a gift to offer there.

We have outstanding universities. Why not commit that they’ll be the finest in the country?
We have planted early seeds for the Burnham Research Institute. Mayo came here. Scripps came to Palm Beach. Torrey Pines. Max Planck Society. SRI in St. Pete. All of these are planting seeds that we harvest into industries — life science, renewable energy and technology.

That is where you set up your incentives and you get exactly what you map out. It is a time that our prospecting must be very thoughtful and deliberate, that it’s not enough that an enterprise chooses Florida because of its tax code, or because a CEO is looking at long-term retirement planning.

It must be that we seek out who we want and that we are particular about who we prospect with, that the dollars that we are willing to incent to attract capital are in those specific disciplines.

Not that we wouldn’t celebrate a quality call center relocating to Florida with 500 jobs — of course we would. But our focus must be bringing that intellectual and financial capital to Florida.

Not only can we change industries but we can change the quality of life for Americans. Be the place for bioscience research. It’s happening in places like Scripps and Burnham. They are absolutely persistent that they are going to find answers to MS and Alzheimer’s, Parkinson’s. That’s who we can become. That’s where we should be focusing.

With agriculture, we know that alternative energy, biomass, wind, solar, offer opportunities. It’s not enough just to see if they work here.

If they can work, why not be the manufacturing and the laboratories of exploring where alternative energies may take us? Let that happen here with Floridians. That’s what needs to be our focus.

What are the strengths of Northeast Florida? The JAXUSA Partnership For Regional Economic Development represents seven counties.
There are several. Without question, Northeast Florida, of all places in Florida, has a center-of-the-universe and business development and business prospecting and a business attraction mindset.

When you are in other metropolitan communities around the state, you are likely to find four to five economic development councils, business development boards, 17 to 18 different chambers of commerce.

If Florida could just begin to model the synergies and the collaboration that Northeast Florida has developed, we’d all be better off. It has certainly served Northeast Florida exceptionally well, coming together and unifying.

It didn’t matter whether it would be St. Johns County or east Duval County that was the recipient of the physical address of the newcomer. They would work together.

That’s just one.

Secondly, it has a rich history in being not only for Florida, but the Southeast U.S., a financial center of excellence. Not long ago it was home to four of the five largest financial institutions in the state of Florida, and we’re still maintaining that talent in our marketplace, notwithstanding that they are no longer the holding company hubs, but the talent is still here.

I would then move to our capacity to be an importer or an exporter in Northeast Florida.

You look at this as Northeast Florida’s synergy of working together in business development and prospecting.

And we are an international player and the port is an asset not just for Jacksonville but for all of Florida.

Paul Anderson is a renowned leader in the operation of ports. He has the credibility of leadership and experience that I think would be necessary when you are allocating very few precious resources.

The asset of the port offers so much opportunity.

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