A state report found that Florida could again hand out millions in economic incentives and get nothing in return. (Photo: Flickr.)
By Ashley Lopez
Florida Center for Investigative Reporting
An inspector general report found that the process for doling out millions of taxpayer dollars to private companies hasn’t changed much since Florida handed $20 million to Digital Domain — a movie graphics company in Port St. Lucie that filed for bankruptcy and laid off its entire staff.
The $20 million was part of $2 billion the state has spent since 1995 on its economic incentives program. The state writes checks and hands out tax breaks to companies in Florida every year in an effort to create or keep jobs in the state.
In the past several years, starting before Gov. Rick Scott’s administration, the state has spent millions on handouts to businesses in the hopes of generating jobs in the state. However, Scott has been one of the biggest proponents and believers in the program.
Scott has made the economic incentives program — which is managed by a state agency called Enterprise Florida — and corporate tax breaks the bedrock of his job creation strategy. What’s more, he has handed out more checks to businesses than any other governor before him.
However, there is no transparency in the program, which has long been a gripe among government watchdogs. The opacity of the program has made it hard to determine whether the money being spent to create jobs actually results in job creation. No state report on the effectiveness of the program has ever been released.
An inspector general’s report released this week, however, found the state is in danger of writing a check for millions and getting nothing in return — again.
“We found no apparent violations of law, rule or regulation,” wrote Melinda Miguel, Scott’s chief inspector general.
As Scott lavishes job incentives on private companies, there’s little to stop another flop like Digital Domain, Miguel wrote.
“Although improvements have been made to statutes and processes since 2009, an award similar to the one to Digital Domain could happen again today if the Legislature appropriates funds and gives the executive branch the discretion to expend those funds,” Miguel wrote …
Miguel recommended a few changes to the incentive process used by Enterprise Florida, an Orlando-based non-profit organization, and Florida’s Department of Economic Opportunity, including a process for state officials to follow when Enterprise Florida and the governor’s administration disagree on an incentive project.
Miguel’s recommendations stems from the fact that Enterprise Florida initially had concerns about investing in Digital Domain. However, the money was approved after then-Gov. Charlie Christ didn’t share their concerns.
Government watchdogs Integrity Florida and the Florida Center for Fiscal Policy and Economic Policy (FCFEP) have agreed that a second look at the economic incentives program is necessary.
Dan Krassner, of Integrity Florida, wrote that the program could be prone to corruption due to a lack of transparency — as well as the fact that private industry plays a large part in Enterprise Florida.
FCFEP said in a report two years ago 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 both tax breaks and handouts have been given each year to businesses in Florida in the past couple of years, the group reported.
Gov. Rick Scott’s commerce secretary, Gray Swoope, recently defended Enterprise Florida. The Orlando Sentinel reported that he said: “Florida’s tax-incentives had created 103,000 jobs since 1995, at a cost to taxpayers of $335 million.”