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- 2013 - January - 30th -

Economic incentives coming under legislative eye

by Michael Peltier, The News Service of Florida

Stung by taxpayer dollars paid to companies that didn’t deliver, a freshman House Democrat on Tuesday filed legislation to provide more transparency surrounding economic development incentives offered by the state.

The bill, HB 563, by Rep. Jose Rodriguez (D-Miami) would require the state to disclose detailed information on jobs promised and delivered through the state’s economic development programs.

Rodriguez said the bill, and a companion expected to be filed by Sen. Eleanor Sobel (R-Hollywood) dovetails with Republican-backed efforts to restore accountability and credibility to the state’s economic development incentive efforts.

“In the last couple of years, there have been some questions about whether they are fulfilling their mission,” Rodriguez said Tuesday in reference to a handful of existing incentives. “This bill will allow us to restore some credibility to the process.”

A general review last week of one incentive program, the Qualified Target Industry Tax Refund, showed that of 1,134 approved applications since 1994, only 432 were either completed or still active. 

Last fall, the Department of Economic Opportunity asked legislators to earmark $500,000 to hire outside counsel to try to recoup at least some of the $20 million in incentives doled out by the state to Digital Domain, the animation company created by Titanic director James Cameron that went bankrupt after promising Florida jobs.

Florida is in line with other creditors, though, joining a growing list that includes local and county governments that provided more than $60 million total in land, buildings and other incentives to lure the company to South Florida in 2009. 

The company in September announced it was largely shuttering its Port St. Lucie facility and laying off most of the 300 employees who worked there. 

Lawmakers have filed several other measures to try to add accountability in economic incentives. Sen. Dorothy Hukill (R-Port Orange) last week filed SB 446, which requires companies to post surety bonds to obtain state financial incentives in case they default.

Sen. Andy Gardiner (R-Orlando) and chairman of the Senate Appropriations subcommittee overseeing economic development efforts, has filed a measure, SB 406, to set up periodic reviews of all the state’s economic incentive efforts. 

Gardiner’s bill is scheduled to be heard next week in the Senate Commerce and Tourism Committee and would set up a program in the Legislative Office of Economic and Demographic Research to review incentives and their return on investment. Further, the office, in concert with the Office of Program Policy Analysis and Government Accountability, would review each economic development incentive every three years beginning in 2014. 

The reviews would address a range of factors including jobs created, salaries, direct and indirect investment and other indicators of success. During a hearing last week, Gardiner told Enterprise Florida CEO Gray Swoope that lawmakers need a detailed accounting of how the state spends its incentive funds.

“It’s good to talk team sport but at the end of the day we have to build a budget,” Gardiner said.

Rodriguez said the idea of more transparency has support across both parties. 

“Many of us in the Legislature are agnostic on whether we should have these types of incentive programs,” he said. “But if we are going to have them, we have to do it in a way that is effective and perceived as fair.” 

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