The pro-con arguments about government payouts of public tax dollars to private enterprise on the promise of job creation and economic activity boiled over this year at the state level. Meanwhile, Manatee County continues to enjoy success with its multifaceted incentive program, quite a contrast from the battles in Tallahassee.
One of the top triumphs comes from the Lake Erie College of Osteopathic Medicine in Lakewood Ranch. Since Manatee County approved a $286,200 incentive package in 2011 for the addition of a School of Pharmacy, LECOM hit the mark on projected job growth with 59 positions, one more than projected, with an average salary of $74,341, well above the county’s requirement for program qualification and higher than the projection of $67,164. The college invested $52 million in the project. New property and sales tax revenue will recapture those incentive costs and then add to county coffers in the future.
That’s just one favorable outcome. Clare Controls is another. The company, which manufactures smart home control systems, hired 55 people after signing a $248,000 incentive contract five years ago — with the average salary at $82,145. Similar high-quality jobs are the primary target of the county’s economic development program.
The state’s public-private incentive leader, Enterprise Florida, collapsed this year. Gov. Rick Scott’s top priority during this year’s legislative session, his request for a $250 million pot of money to attract businesses to the state, went down in flames. The Republican-controlled Legislature didn’t appropriate a nickel. Incoming House Speaker Richard Corcoran called incentive funding “corporate welfare,” failing to pass muster with a conservative agenda.
Enterprise Florida was also fraught with problems as a watchdog group and other organizations uncovered evidence of favoritism, a big-business bias, conflicts of interest, weak performance measures and the failure to meet job creation objectives. The organization was also criticized for picking winners and losers, issuing needless incentive packages to companies already likely to be drawn to Florida’s business-friendly environment, Integrity Florida and Americans for Prosperity Florida declared in their 2013 investigative report.
4,200Projected job growth from Manatee County incentive program
Manatee County economic development professionals would dispute the “corporate welfare” assessment with return-on-investment figures. Since 2009, Manatee County, in partnership with the state, entered into agreements with 67 local companies for incentives totaling $10.4 million. The projected job growth from those deals adds up to almost 4,200. Plus, around 330 jobs were saved.
Manatee County’s other big incentive winners are key employers: Feld Entertainment, a giant in the production of live shows; Star 2 Star, a telecommunications company; Air Products and Chemicals, a worldwide supplier of industrial gases and equipment as well as chemicals; Sun Hydraulics, a growing valve manufacturer, and vertical marketing giant ItWorks! The Herald’s regular series, “Incentivized in Manatee,” details the county program through individual companies.
To qualify for incentives, Manatee County requires companies to relocate or expand here, pledge to add employees at a salary greater than the company’s industrial sector average, invest in research and development, or invest in capital projects. The county also plays it smart by not handing out checks up front but only after a company has achieved its incentive goals.
$650,000Amount Sarasota County paid upfront in job creation incentives, but company collapsed
Sarasota County got burned badly some years ago by writing a check before jobs materialized — a check for $650,000 issued to Sanborn Studios LLC, whose glitzy promises wowed officials but proved to be a mirage. Embarrassed county officials quickly changed the incentive program to a back-end system.
Incentive contracts are a bit of a gamble, but one worth taking. Some agreements collapse because of market downswings, incentive payments end and payback is required, thus protecting Manatee County from a Sarasota-like implosion.
One state incentive program — which received almost $300 million in 2010 — demonstrated great success, but then became a casualty of the conservative agenda. Once Florida was a coveted location for movie and television productions, thanks to our tropical paradise, scenic beaches and year-round sunshine. Once the state’s tax incentive program ran out of money four years ago and legislators refused to replenish the pot of money year after year, filmmakers began looking elsewhere.
Georgia now gets quite a bit of this valuable business. In April the president of Film Florida told the Hollywood Reporter that Florida lost about $650 million of business in recent years — to the Peach State and elsewhere. Even productions about Florida are produced in other locations, a discouraging state of affairs.
The state should reform Enterprise Florida by instituting strong ethical standards and revive the film incentive program — and overpower the political opposition with sound economic arguments and evidence. Manatee County could serve as a model of success with its cautious approach to incentives.