A Jacksonville native, State Rep. Lake Ray was elected to the Florida House in 2008 and re-elected subsequently to represent District 17, which encompasses much of the Arlington and Southside. A civil engineer by trade, Ray has been known as one of the port’s leading advocates.
The eighth-generation Floridian served on Jacksonville’s City Council from 1999-2008 and is the current Duval Delegation representative of the Jacksonville Waterways Commission.
He is the current president of the First Coast Manufacturers Association, where he oversees the operation of the association and provides leadership and advocacy for the Northeast Florida manufacturing industry.
Ray was recently elected delegation chairman, succeeding State Sen. John Thrasher, and will lead the 11-member body as it heads into session in January.
Ray met with Daily Record reporters Monday to discuss a wide range of topics including the port, his leadership role, manufacturing and the best advice he’s been given in budget-tough legislative times.
How did you reach this point where you had this opportunity of leadership?
I think it was recognizing what the need was. Three years ago, when I walked into the Legislature, there was no doubt that the question on everybody’s mind was what to do about jobs and the economy. That was the first question. The second question was what to do about jobs and the economy, and the third was, of course, what to do about jobs and the economy. It just consumed everybody.
I think that my background was that I was an engineer and I did a lot of work in the maritime industry — my strength. Then the Florida Ports Council came and they made a presentation, and I was very surprised that somebody else didn’t pick it up.
The information I was given shows that there were about 550,000 people in the state employed in the maritime industry. Now, that’s international business and in trade, things that are connected to the port: rail and trucking, or the actual physical structures on the facility. I knew that the Panama Canal was going to be open sometime toward the end of 2014, so I knew the dynamics were changing.
I went through a wild moment and I truly transitioned beyond looking at my work as something that was just about a project. My project was connected to the economy the city and the state. I had a complete paradigm change. It’s when I said, ‘we’ve really got to start getting engaged in ports.’
The first session I worked on a few things, but it wasn’t until after I started going around to the communities and hosting summits, one here in Jacksonville, one in Tampa and one in Miami.
I met with the local officials, met with the members of the Legislature and representatives and talked with them about the essential needs.
I brought together other experts and other information so that people were starting to get engaged and they could see what was going to happen. They just needed someone to create a path, to create a blueprint. That’s where my professional side started kicking back in of understanding what the needs were for being able to get there.
A lot of the pieces of legislation that I’ve drafted will be toward streamlining, it will be toward funding, it will be toward understanding where we are in terms of ports.
That’s the first step.
But if you roll the clock back to that same point in time, it was obvious to me that the problem with our economy was that it was based on agriculture, which is a good thing, and it still is, but then it was tourism and development.
There’s nothing wrong and I don’t want to do anything to hurt any component of tourism or development, but everybody in Tallahassee was like, ‘we’ve got to do something to streamline the regulatory process or eliminate things for permitting and development.’
It was like, we’re fixing something, we’re going to try to fix something that’s broke, and the reason it’s broke is because we put it there. We have so much growth and so much going on and so much demand on our resources. .
I’m thinking, ‘so if we improve our ports, we obviously will capture more jobs,’ but more importantly, I think that we will capture a manufacturing base.
It was obvious to me, if you improve your ports, you then provide the opportunity to start changing those drivers in the state and broaden them to where we can start to manufacture things.
You’ve got 14 ports around the state. We literally reach the world. And a lot of those ports are engaged in north to south trading, not east to west. But with the entire port system, we can reach the world.
But, the ports are not the only component. It’s about the full logistical movement of freight.
How long does that path take to complete? Is it ever complete?
That time line is going to be something realistically around 10-15 years. If you look at Savannah as a model — and as a model not a role model — what you would see is that they had a 15-year plan. They’ve now completed that 15-year plan.
Yes, it was about the port, but you see a lot of their pieces were land and industrial development opportunities and other port-related improvements. And there was road improvement, and more significantly, rail improvements like we’re working on today. I believe moving into that is most important.
What is the state of manufacturing in Northeast Florida?
In my lifetime, I’ve watched us go from a very heavy manufacturing industrial city into one that had a lot of financial institutions that were here, insurance companies that were here, and through the years we had a lot of balance.
Then there was an attitude that was developed back about 30 years ago and that was less focus on the manufacturing, less focus on skilled labor, less focus on blue-collar jobs, and I think now they’re rethinking that.
The governor’s very focused on manufacturing. There was an analysis I read over the weekend, from economic forecasters, and it was kind of interesting.
What they’re saying is not a surprise. We’ve had policies that encouraged, almost driven manufacturing out of the country, primarily toward China. What you’re seeing is the weakening dollar value, and the strengthening Chinese yuan.
If you look at their workforce, it is wanting more and more reward for their work. It (the analysis) demonstrated that the cost differential is only about a 39 percent difference in terms of labor.
When you weigh the labor component into labor and materials, and that our U.S. workforce is a much higher quality workforce and has a much higher productivity, when you lay that component in there, it means that the difference is less than double digits. It’s a single-digit difference between products that can be manufactured here versus in China.
That means there’s a shift and you’re going to see this shift start to happen. As a city and as a region, we’re well positioned, particularly with our port to bring in certain components of manufacturing or certain things that will be manufactured for distribution.
We should be in a perfect spot for the railhead north and the railhead south. We’ve got a very good opportunity.
The governor, if you look at his plan, he’s got seven steps and one of them is manufacturing as being a key component.
What’s your relationship with the governor?
I would call it very good. The governor and I have met on several occasions to talk about our ports. I’ve met with him on several different ports in a number of different meetings and I meet with members of his staff or various secretaries like (Enterprise Florida President and CEO) Gray Swoope and (State Economic Opportunity Department Director) Doug Darling. We’re working together on this. Everything I’ve been working on is consistent, so right now I’m just trying to make sure that anything I’m doing feathers together nicely with what they’re doing.
You were called out by the media saying that there’s a conflict with your position on the Georgia-Pacific project. How do you plan to address it?
(Editor’s note: Ray also sits on the City’s Waterways Commission, which recently reviewed a resolution requesting that Georgia Pacific’s permit for wastewater discharge into the St. Johns River be delayed until further research is completed.)
I think as it relates to the Georgia-Pacific issue specifically, I think I’ve said all that I need to say.
As it relates to that issue, which if you dissect what I was saying, it wasn’t a position for or against the GP, it was the Department of Environmental Protection’s position as to how they handle it and what they do. I stand by that.
There were people who were critical that I was working on trying to get funding for ports when I was working for a company that does engineering. I didn’t realize until not too long ago, there are three members of the House who are funeral directors. So you’ve got the different interests, and the reality is that everybody who is over there comes with some background and it is a part-time position.
With regard to Georgia-Pacific or any of it, we’re going to take positions. If I were going to really engage in the issue with Georgia-Pacific, I would have gotten into the technical component. I would have gone after what the technicals were. I was trying not to get into the middle of it, and I didn’t really want to.
You are starting the session earlier this year, in January, because of the redistricting issue. What is the latest?
As I understand it, I think there are 65 maps out there now. I don’t know if that’s maps for the entire state or maps that apply to this region, but I understand there are 65 different ones that are out there. As it relates to how those lines are going to be drawn, I don’t sit on the committee.
I have heard that they expect that there will be at least 12 and as many as 24 members of the Legislature that will not be in the same districts when the redistricting is complete. That’s the only thing I know, and that’s very preliminary. No one knows exactly what those lines are going to look like right now.
I’m going to be looking with interest as well. I don’t believe that I’m going to be drawn out of my district, but anything’s possible.
After redistricting is done, you have a complete session. What do you think the session is going to look like?
From everything I’ve heard, between that and the budget, it just sucks the life out of the session. That’s why you will see a very small amount of legislation that will be passed. I think you will also see some key pieces. There’s a jobs bill that’s kind of being bantered around and there’s a transportation bill. You’ll see a handful of other small bills.
Any pieces of legislation you will push?
I’ve got five or six bills that I’m looking at right now, and it depends on whether I put it in the transportation bill or whether I run them separately.
I’ve got a better bill that actually will be for targeted industries and will provide an incentive, a percentage of tax credits that will be given if companies invest $10 million or more and provide so many new jobs.
There’s another one that’s related to containers and cargo movement. If somebody comes in and makes an improvement in their area and starts bringing a new shipping or distribution operation into our area, it would provide them with an after-the-fact rebate or incentive rebate.
That incentive rebate would be $35 per container until such time as the monies that are appropriated run out.
You may say how much money is going to be in there? Right now, I’ve got something that’s showing $10 million. I don’t know how much that’s going to be there because it may be that we’re in a position to actually grab more or less. What happens is they have a little of what the Senate has, a little of what the House has, and they agree that they are going to spend so much on incentive-related packages, economic development packages.
Then it will become how much they decide to allocate into each component.
I think that the governor has an interest, and I know everybody else has an interest, so I think we’ll have that bill.
Why have ports all of a sudden become the next big economic driver for Florida?
The boom-bust economic cycles went back before 1800. If you start looking at using 1880 as a time line, what you find is about every 20-25 years, we’ve been through these different cycles.
We’ve been hit more here in Jacksonville this time around than we have in the past because we lost our balance of industry and our balance of financial institutes. It became a lot more driven to development, which wasn’t sustainable.
The ‘why now,’ I think everybody’s kind of realizing that what we all learned coming out of school was that we were going to be a service nation. No one could ever figure out what that is, because economies aren’t built on this ‘service.’ they’re built on three things: you make it, mine it or grow it.
If you stop and think, when you get off that path, your economy will collapse and that’s happened in other nations in history. They could no longer sustain things, or that the affluency of the nation got so high that they had other people start to manufacture things and that caused their ultimate collapse.
I think everybody’s looking now, and saying, ‘what can we do?’ and that is why ports, that is why manufacturing is a great opportunity.
The two will work in tandem to provide a pathway for broadening, not to change, but to broaden.
You entered politics at the state level during one of those bust cycles. How difficult has it been and what’s the best advice you’ve received in terms of accomplishing goals?
I think the best advice that I’ve received has probably been ‘share.’ Part has been observation and if you understand what is driving the legislative process you can be more successful.
Understanding the legislative process in terms of, right now the No. 1 thing, which is jobs and the economy. What do we need to be doing to do that?
If you connect your legislation into that, you’re going to be more and more successful. It doesn’t mean that it’s just about ports.
There’s been some legislation out there about the entertainment business, making movies here. There have been other different kinds of incentive related programs. So it’s not about one or the other, but it is about understanding that we’re going to invest. There’s limited number of dollars.
City Council recently passed a “Support the Port” resolution. What else can Council and the mayor do here at the local level to support the port’s cause?
Follow what we’re looking at in Tallahassee and streamline interaction between the private sector and the public sector.
There’s another bill that I didn’t share with you, called the ‘One Stop Shop.’ It will be for QTI (Qualified Target Industry tax refund) businesses that we’re targeting to try to bring in.
The objective will be that the state will handle the permit process, so that if you were the governor and you were talking to somebody about wanting to come in, you would say ‘look, I can go into this county, because they’ve agreed to work with us, and we will streamline that process, so that you can get there very quick.’ A two-month, three-month process. That is what Georgia and other states that are really trying to be competitive do.
So, look at ways to do that and engage.
I think the other thing to do is certainly, do everything we can to not raise any more taxes or anything of that nature because it’s just not the right environment to do that.
Also, be prepared to always speak. I think the public is growing in their awareness of the importance and value of the port. Every time we get the chance to talk about that, it will be significant. Again, it’s not the port in a vacuum. It’s the port in terms of movement of goods and how we can manufacture things.
You talk about awareness and you talk about the QTI program as well. There has been growing opposition to such incentives going to companies that are bringing in billions of dollars. What do you tell constituents with that opinion? Is it your responsibility for education on why the program is needed?
Ultimately, that’s got to be the case. It is about getting some understanding.
I was presented a study this past week that applied to manufacturing. I can’t say the ones the city’s looking at in particular.
I believe what I would suggest to them to look at what has been effective. Look at what has worked and what hasn’t worked. Because there are cases that things haven’t. The study that I was presented showed that in Florida, over the course of the last several years, for every three jobs that were created, one of those was the result of an incentive package.
It lays out the case that in fact we’re doing the right thing with very scarce dollars. And certainly, as one in the past looking from the outside in, it is an aggravation, but until you really have the opportunity to look at it, and see what that benefit, it doesn’t mean that I don’t respect people who are in opposition to that. I do. I value that, and understand why they feel that way.