Scott’s Team Defends State Handouts To Business

The state is still touting it's secretive and expensive economic incentives program. (Via Flickr)

Florida is still touting its secretive and expensive economic incentives program. (Photo: Flickr)

By Ashley Lopez
Florida Center for Investigative Reporting

During a meeting before an economics panel in the state Legislature, Gov. Rick Scott’s commerce secretary, Gray Swoope, defended the state’s controversial economic incentive program. The program hands out millions of tax dollars in the hopes that the companies create jobs or keep their business in Florida.

However, to this day, the transparency of this program has been almost nonexistent. In short, officials have yet to prove that this program has even created jobs in the past several years.

The Orlando Sentinel reports that Swoope said, “Florida’s tax-incentives had created 103,000 jobs since 1995, at a cost to taxpayers of $335 million.”

However, the information supporting those claims is mostly not public.

According to the Sentinel:

With a PowerPoint displaying Scott’s “7 years = 700,000 jobs,” Swoope said the governor’s team was doing more with fewer dollars, and the governor was well on his way to meeting his campaign job-target.

“The story is more jobs, better wages, better return, and less money going out. It’s a strong story,” Swoope said.

For the last year, Scott’s jobs agency has struggled to provide proof Florida’s tax-incentives have created the promised jobs over the last two decades. His Department of Economic Opportunity is on its third executive director in less than two years.

This summer, Senate President Don Gaetz, R-Niceville, and Minority Leader Chris Smith, D-Fort Lauderdale, forced the agency to go out for bids to hire an outside auditor to review its incentive awards. The agency said Wednesday it was “very close” to finalizing a contract with a CPA. Lawmakers last year also pushed the agency to create an online portal to disclose contracts, and it debuted this summer — although a majority of the contracts awarded since 195 aren’t on it yet.

Last year, a movie company called Digital Domain, which is based in Port St. Lucie, filed for bankruptcy. This was after  Floridians had shelled out about $20 million in economic incentives to the company. Digital Domain laid off about 300 Florida employees and local governments were expected to lose an additional $110 million.

For years, the state has spent millions on these handouts to businesses in the state in the hopes this would generate job growth. During the Scott administration, these “incentives,” along with massive tax breaks, have been the bedrock of the state’s job creation plans.

According to earlier reporting from the Sentinel:

During his first 16 months in office, Scott has been cutting economic-development deals at a faster pace than his two predecessors, according to an Orlando Sentinel analysis of the contracts the Governor’s Office has signed.

The deals reflect the former CEO-turned-governor’s broader economic-development “stimulus” strategy: cheaper, smaller and sometimes higher-risk. And they show something else: Instead of bringing in new companies from out of state, a majority of Scott’s economic-development deals are going to companies already here.

The only light shed so far on this controversial program has been by accident. This is despite the fact that lawmakers promised to bring more transparency to the program.

Last year, state lawmakers promised progressives that there would be more transparency around the state’s economic incentives program. During this last legislations session, Florida Senate President Mike Haridopolos committed to including “a formal study reviewing the effectiveness of economy development incentives, tax credits, exemptions, and subsidies,” in the state’s economic incentives bill.

This followed a report that came out the year before from the Florida Center for Fiscal Policy and Economic Policy. The report (PDF) called on legislators to evaluate whether the many tax breaks and grants afforded to companies by the state are actually creating jobs. The public policy group argued that the state “provides huge benefits to selected companies each year, many of which receive little or no examination of their value to Florida’s economy.” At least $4 billion in annual breaks have been given to businesses in Florida in the past couple of years, the group reported.

Over time this veil has allowed lawmakers to make big claims about the effectiveness of the program — that is, without any publicly released data to defend those claims. This week, officials continued more of the same.

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