Senate Leader Balks as Gov. Scott Seeks $85 Million in Business Incentives and Recruitment
FlaglerLive | September 15, 2015
Florida’s top business recruiter might face a tough crowd this week when he goes before a Senate committee to push Gov. Rick Scott’s desire for more money to entice companies to the state.
Senate President Andy Gardiner, R-Orlando, sent out a memo Monday reaffirming his chamber’s stance that lawmakers have adequately funded Enterprise Florida, a public-private agency that Scott says is running short of recruitment dollars, and saying a current business-incentive program needs to be revamped.
Instead of placing money into a low-yield commercial escrow account to await businesses reaching job-creation or performance benchmarks, something “not specifically authorized by the Legislature,” Gardiner wants the state to annually cap the amount of money that would be available for contractually obligated business incentives, similar to the state Department of Transportation’s 5-year work program.
“This approach could free up millions of tax dollars that could be used to grow Florida’s economy today,” Gardiner wrote.
Gardiner’s memo came as Scott has been crisscrossing the state urging local business-development agencies to pressure lawmakers to boost the funding for Enterprise Florida during the 2016 legislative session, which starts in January.
Bill Johnson, appointed earlier this year as president and CEO of Enterprise Florida, is scheduled to appear Wednesday before the Senate Commerce and Tourism Committee to discuss the state’s economic-development incentives.
Scott on Monday defended the incentive program and his call for more cash to fund it. Enterprise Florida deferred comment to Scott.
“If we recruit a company to move to our state, you have to allocate the dollars,” Scott told reporters.
“Would you go and commit a movement to the state, commit your resources through capital investments, maybe make an announcement that you’re going to move to another state, if the state wasn’t committed with the resources,” Scott continued. “Those dollars are absolutely committed to those companies. It’s put into an escrow account and committed to those companies.”
Scott also repeated his assertion that Enterprise Florida has just $9 million remaining for recruitment efforts in the current fiscal year, which ends June 30, 2016. Scott, who wants Enterprise Florida be run more as a private company, added that the state money is needed to diversify the economy by adding manufacturing jobs to tourism, real estate and construction.
On Aug. 20, Johnson said the $9 million remaining for performance-based deals could be gone in a matter of weeks.
Earlier this year, Scott asked lawmakers to set aside $85 million for business incentives. The final budget for the fiscal year that started July 1 included $53 million for Enterprise Florida, of which $43 million was for incentives and $10 million was for marketing.
Senate Transportation, Tourism and Economic Development Appropriations Chairman Jack Latvala, R-Clearwater, argued in June against Scott’s request. He said the agency should use more private money for incentives and that marketing dollars should come from money that Enterprise Florida already has in an escrow account.
Since fiscal year 2012, the state hasn’t paid more than $19 million a year in incentive payments.
In his memo, Gardiner also points out that 55 percent of the $398.2 million appropriated and re-appropriated for business development in the same time has yet to be spent.
“To put this amount in perspective, $220 million could easily fund at least four 10-day back-to-school sales tax holidays,” Gardiner wrote.
Gardiner also noted that $118 million of the $263.7 million that lawmakers have allocated for Enterprise Florida’s “Quick Action Closing Fund” program in the same time sits in escrow, awaiting allocations that require businesses to reach preset job-creation measures.
“Continuing to use this approach is clearly far from the highest and best use of limited taxpayer resources,” Gardiner wrote.
–Jim Turner, News Service of Florida