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Job Incentives In The Sunshine Economy

Feb 22, 2017
Originally published on February 22, 2017 9:27 am

Over the past year, Florida has been second only to California in the number of new jobs created with just over a quarter of a million new jobs. But California’s labor market is twice the size of Florida’s. The rate of growth of Florida's job market also ranked second in the nation at 3.1 percent. (Oregon was No. 1.)

 

Millions of state taxpayer dollars have been spent in the effort to attract and grow jobs in Florida. But most of those dollars have stopped and a legislative effort is underway to do away with them altogether. It is a political fight between two top Republicans over economic development policy and the role of government.

 

The state agency responsible for doling out money and marketing, Enterprise Florida, is under pressure and fighting for survival.


 

 

Gov. Rick Scott has built his short political career on a single issue: jobs. He wants to continue using state dollars to entice companies to add workers in Florida. But the speaker of the Florida House of Representatives, Richard Corcoran, thinks the state should get out of that practice. Corcoran has deep-pocketed support from Americans for Prosperity, the Koch brothers-funded political advocacy group.

"What we're going after is diversification and higher wages," said Enterprise Florida board member Alan Becker. The former Democratic House member from North Miami defended the quasi-state agency's work. Supporters argue the work extends beyond the hot-button issue of job incentives. "We counsel about 2,500 Florida companies per year about how to export. We get out and find companies looking to move from where they are or looking to expand. We want them to choose Florida to be the place to do that."

But it is the tax refunds and cash incentives used to help lure companies to Florida that opponents seize on.

"We do not believe this is a core function and role of government," said Skylar Zander, deputy state director of Americana For Prosperity. That political advocacy group is backed by David and Charles Koch. The Koch brothers are known for supporting libertarian-leaning legislation. In Florida's case, that includes House legislation that would eliminate Enterprise Florida.

The debate

WLRN: Does Enterprise Florida pick winners and losers?

Becker: We will help any company in any industry. Those we focus on by actively marketing and soliciting fall into nine categories of targeted industries. In that sense we are determining where we can get the best diversification and the best income growth. I don't think there's a single bill passed by the Legislature that affects any industry that hasn't picked winners and losers in that industry. 

Zander: We have a low-tax state. We have a great weather climate. We have infrastructure and we have education. That doesn't mean we're No. 1 in these programs yet. We still need to go further in these things. 

 Why does Florida need job incentives?

Becker: We don't win on incentives in Florida, but we can't win if we're completely out of the game. The competition is the other states. The other states are competing with incentives. 

Zander: I don't agree with that because I believe a lot of businesses come into Florida without incentives. I think we need to focus on the businesses that want to come here for the landscape. Make sure we have a low-regulatory environment. We are good at cutting taxes. There are always ways we can reshape our economic development. 

Is how the incentive money is used inefficient?

Becker: We only incentivize those companies that have at least 15 percent higher wages than the state average. The way Florida does it is far smarter than other states. Other states give money upfront. We do not do that. We only give incentive money where it's agreed upon after a company has performed, after they have created the jobs they committed to create and invested the money they committed to invest.

Zander: Those dollars are not being circulated in the economy. We're talking about taking a large sum of money and giving it away to very few companies. You don't always see a high return on investment. We would rather folks have their money back and allow them to be the entrepreneurs.

Do the programs favor out-of-state and larger companies?

Becker: That's not true. In our international work we help thousands of companies every year to develop an export business. That's helping local companies. When we take hundreds of companies overseas to find buyers and distributors that's helping local companies. When we provide loans and loan guarantees to emerging high-tech small companies that's helping local companies. 

Zander: We're not talking about where this money could have gone for organic growth. 

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