When Gov. Rick Scott visited Jacksonville last week, he made one thing clear — he believes cuts to Enterprise Florida and Visit Florida will spell doom for the state’s bottom line.
He was left with disappointment after lawmakers approved the state’s $83 billion budget Monday that didn’t include his economic priorities.
“Once again, the Florida Legislature has turned their back on Florida’s ability to fund economic incentive deals that help our state outcompete our top competitors for important jobs,” he said Tuesday in a statement.
Scott wanted about $85 million to expand Enterprise Florida Inc., the state’s business recruitment and economic development organization.
The public-private organization, helps businesses and economic-development partners identify expansion sites and determine whether projects qualify for state incentives like the Qualified Target Industry Tax Refund program.
Scott’s requested funds would have been used to re-establish the Quick Action Closing Fund to recruit new companies to the state.
Lawmakers not only rejected Scott’s request, they slashed the organization’s funding from $23.5 million to $16 million.
Opponents of Enterprise Florida, led by Republican House Speaker Richard Corcoran, said taxpayer incentives were “corporate welfare,” didn’t meet their promises and destabilized the market for companies that did not receive assistance.
Enterprise Florida spokesman Nathan Edwards provided comparative figures showing the largest cut affecting marketing and promotions.
Those dollars are now rolled into the budget for operations, a cut of about $7 million.
QTI grants, which are doled out over time after companies meet their pledged job targets, won’t be affected.
As a public-private partnership, Enterprise Florida also receives financial support from the private sector to pay for its operational costs, although that hasn’t been an even split in recent years.
According to a 2017 House Staff Analysis of Enterprise Florida, cash from the private sector rarely exceeded $2 million each budget cycle from 2012–16, with the state chipping in an average of $20 million.
While plenty of Republican lawmakers supported the cuts, some were not happy.
State Rep. Jay Fant, who was in town Wednesday to launch his bid for attorney general, said the lack of funding sends a message to businesses looking to expand in Florida.
“We’ve already lost business because of it,” Fant said. “We can’t be the only state that doesn’t compete.”
Fant, who supported the governor’s budget efforts, said if his colleagues would have compromised with Scott, he probably would be more inclined to sign the budget as-is.
“I do believe that it will be poorly received now and I’m afraid we might lose some projects in the budget because of it,” Fant said.
Scott hasn’t said if he plans to veto the entire budget or specific projects, although he did acknowledge those options are on the table.
For QTI grants, the state provides 80 percent of the tax refunds with cities chipping in the remaining 20 percent.
A recent example in Jacksonville would be the economic development agreement between the city and Availity LLC, which secured $1.875 million in state and local incentives.
The state provided $1.575 million through an agreement for $1.2 million in QTI funding and $375,000 in a Florida Flex Training Grant, with the city picking up the remaining $300,000 in QTI funds.
In return, Availity pledged to make a capital investment of at least $12.1 million and add 250 jobs at an average $70,000 a year by the end of 2021.
Enterprise Florida isn’t the only resource available for economic development, said JAX Chamber President Daniel Davis.
However, he said those deals often rely on the working relationship and access to the incentives negotiated by Enterprise Florida.
“It’s a very important part of our process when we attract companies to this community,” Daniel said.
A Republican and a state representative from 2010-14, Davis also was disappointed to see the Legislature seemingly ignore the governor’s economic development proposals, saying it creates an unnecessary issue for the state.
“We have a great story to tell with our low tax climate, great workforce and quality of life we’re able to provide here in Florida,” he said. “But we’re in tough competition with Georgia, Alabama and North Carolina, and every tool that’s available is critical.”
From the city’s point of view, Enterprise Florida provides a lot of the leg work when it comes to the early stages of economic development, according to City Council President Lori Boyer.
“They do a lot of the vetting earlier on, making sure these companies will actually deliver on their promises to bring jobs and provide an economic impact,” she said.
Boyer said it was a complicated process. “We simply don’t have the staff and the administrative services to do that on our own,” she said.
Office of Economic Development Executive Director Kirk Wendland was not available for comment, according to a city spokeswoman.
VISIT FLORIDA SLASHED, TOO
Enterprise Florida wasn’t the only priority of Scott’s that was cut.
He also asked lawmakers to expand the marketing and promotional efforts of Visit Florida, the state’s tourism arm.
Instead of $100 million, lawmakers allocated just $25 million — a $50 million reduction from the previous budget.
The agency has came under fire from some lawmakers who claimed it was wasting money, citing a $1 million promotional agreement with Miami rapper Pitbull.
A 2017 report from the state Office of Program Policy Analysis & Government Accountability stated it was hard to distinguish Visit Florida’s influence from that of other tourism agencies that also promote the state.
For Jacksonville, the change comes at a bad time, said Paul Astleford, president and CEO of Visit Jacksonville, the tourism and convention bureau for Jacksonville and the Beaches.
“These cuts hit areas like us much harder than they hit most of the state,” Astleford said.
He said other states are starting to put more emphasis into their selling, marketing and promotions, “while we’re cutting it out.”
Astleford said Visit Jacksonville had worked with Visit Florida on cooperative marketing that he said was helping to bring more national and international exposure to area, since Jacksonville tends to have less name recognition than Miami or Orlando.
“That’s something we could never do on our own,” he said, adding that’s probably not going to continue with current funding levels.
Scott spent the past two weeks across the state promoting his budget as the legislative session was ending.
While an across-the-board veto of the budget is rare, Scott has indicated that he could go that route.
Even so, leadership in the Florida House and Senate believe they have a veto-proof majority.
Here’s a breakdown of numbers from Enterprise Florida Inc.:
2017-18 BUDGET
$16 million total. With appropriations for operations and international trade:
$9.4 million for operations, (which now includes funds for promotions and marketing).
$6.6 million for international trade
Rebuffed: Scott wanted $85 million to fund the Quick Action Closing Fund, received nothing.
2016-17 BUDGET
$23 million total. Broken out with specific appropriations for three areas:
$8.4 million for operations
$6.6 million for international trade and development
$8.5 million: Marketing and promotions
Rebuffed: Scott previously asked for $200 million expansion of EFI, received nothing.
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