Manatee County voters will decide two issues on the June 18 referendum. While the half-cent sales tax increase to pay for indigent health care has ignited heated debate, the other item on the ballot has been flying under the public's radar. Officially titled the Economic Development Ad Valorem Tax Exemption, the measure will provide a critical incentive for business and job growth.
Commissioners seek the power to grant property tax exemptions to qualified companies that invest in new jobs here. Florida created this tax relief program for local governments to implement in order to nurture their economies.
Manatee County is currently at a competitive disadvantage with surrounding counties, all of which employ this ad valorem tax abatement to attract new companies and encourage existing businesses to expand. Should Manatee voters pass this ballot measure, the county would enjoy a level playing field in the highly competitive economic development sweepstakes.
State statutes allow local governments to exempt up to 100 percent of property taxes for 10 years at the most, with strict criteria determining the percentage and time span.
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First and foremost, the new jobs must pay above the county's average wage and the number of positions weighs into the decision on the incentive amount. The company must belong to a high-impact sector with high-skill, high-paying jobs. How large an investment in new facilities and equipment is another factor.
Each application for tax abatement will be thoroughly vetted. The incentives are performance-based, too, with businesses held accountable on an annual basis. Companies that fail to produce the promised number of jobs and pay scales will lose the exemption.
This is not corporate welfare. Voters can rest assured that qualified companies do not receive any money up front and must earn the tax break.
Only the county's portion of the property tax can be exempted in this program. The school district's ad valorem revenue and other taxes cannot be touched. And passage of this incentive will not bring any tax increase.
The Bradenton Area Economic Development Corp. knows that business executives and site selection consultants eliminate potential locations that lack certain competitive incentives like property tax relief, this particular liability a key consideration. With most Florida counties offering this powerful economic stimulant, Manatee gets scratched off the list quickly. Even existing manufacturers and other companies might look outside Manatee County for expansion projects.
The overarching goals are to diversify our economy, attract talent to Manatee County and help prevent a brain drain of young people for want of appealing job opportunities. Some of the targeted industries are the life sciences, aerospace, defense and others in the creative class.
Job expansion brings home purchases, restaurant income and retail sales -- money that flows through the community again and again. The returns far exceed the abatement investment, as Sharon Hillstrom, the EDC's president and chief executive, indicated in an interview with the Herald Editorial Board.
We see no downside to this proposal, only a strong and vital upside. Without this incentive in its economic development took kit, Manatee County will continue to get hammered by neighboring counties.