With more than a million Floridians unemployed and poorly functioning banking, retail, construction and real estate markets, the stakes could not be any higher for businesses as the 2010 Legislature gets under way in Tallahassee tomorrow.

The dangers lurking in an economy overly reliant on residential construction and real-estate development have again been made abundantly clear. High foreclosure rates, fueled by double-digit unemployment, suggest that the old model is broken beyond repair.

One way forward, say experts, is a greater integration of Florida into the global economy.

"Global trade liberalization has contributed to the development and growth of Florida's international trade sector and in the process has helped to diversify the state's economy," according to a recent Florida TaxWatch analysis.

In one of the few bright spots in recent years, Florida's goods exports (manufactured and non-manufactured commodities and re-exports) totaled $54.1 billion in 2008 - up 21 percent from the prior year - making Florida the fifth leading export state in the nation. Since 1999, the value of Florida's exports more than doubled.

Manufacturers, who accounted for almost two-thirds of the state's exports, are looking to the state to keep taxes low while providing incentives to relocate and expand in Florida, which has established a busy pipeline to its No. 1 trading partner, Brazil. One idea being floated would provide a complete tax exemption for all capital investment used in the manufacturing industry (a break offered in many other Southeastern states).

Jobs Summit

Sen. Mike Haridopolos, R-Merritt Island, the 2011 senate president-designee, and 2011 House Speaker-designee Dean Cannon, R-Winter Park, aired workforce issues - for better and for worse - at a Florida Jobs Summit in January in Orlando. Attendees say the gathering galvanized the focus on economic development as never before.

From regulatory philosophy to space exploration, the consensus is building that Florida's public sector must work more closely with private entrepreneurs to broaden the state's economic base - or risk a downward spiral of deficits and stagnation.

Business leaders agree that the public sector has a role to play -- and that the state can help by reforming and revising the public education system.

Revisiting Class Size Rule

Among other things, business wants more flexibility on class-size reduction rules, which siphon billions of dollars from education budgets (already the biggest single state-spending category) and make less available for economic incentive programs.

Former Gov. Jeb Bush brought Florida out of the 19th century with a testing and accountability model that has been emulated across the nation. That has helped to lift achievement of low-income, minority students and narrow the performance gap. But graduation rates and college matriculation remain stubbornly low. Businesses say they need higher levels of academic proficiency from Florida graduates in order to compete in an increasingly skill-based economy.

Now business wants to revisit the FCAT program in high schools, design more rigorous college-prep curricula and, above all, reward the best teachers with performance-based pay. The Florida Chamber of Commerce and the Florida Council of 100 recently issued a sweeping policy package spelling out these reforms.

Competitive Disadvantage

On taxation, Florida TaxWatch says the state is "at a competitive disadvantage compared to an expanding number of states that have adopted the Single Sales Factor (SSF) apportionment formula for corporate income taxes."