By Ashley Lopez
Florida Center for Investigative Reporting
Thanks to a “mistakenly released” database of the state’s recent economic incentives package, Floridians are afforded a rare glimpse into one of the least transparent ways Florida tax dollars are spent.
For years, the state has spent millions on handouts to businesses in the state in the hopes this would generate job growth. During Gov. Rick Scott’s administration, these “incentives,” along with massive tax breaks, have been the bedrock of the state’s job creation plans.
According to Aaron Deslatte of the Orlando 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.
Since January 2011, Florida has pledged nearly $155 million in tax breaks and other incentives to companies promising to create jobs in the state.
Among the biggest corporate winners: Embraer Aircraft Holding, Raymond James Financial, the Boeing Co. and Bi-Lo LLC, the new owner of Winn-Dixie Stores.
The pledges came with promises to create up to 32,570 jobs, according to a database from the Florida Department of Economic Opportunity (DEO).
The recently released database revealed some recipients whose names the state had withheld under privacy agreements during negotiations. Typically, state officials refuse to identify companies even as they approve project incentives. Instead they wait until companies are ready to announce a relocation or expansion …
Reached Friday afternoon, Gray Swoope, president and CEO of Enterprise Florida, the state’s primary economic development group, said the database released by DEO mistakenly included information about 80 deals that are still under confidentiality agreements. The entire list covers almost 270 deals.
Swoope declined to discuss which projects may be covered by confidentiality laws, but he said he was concerned that those company names had become public.
“I’m worried first and foremost about my state’s ability to compete when word gets out that we breached the confidentiality of that company,” he said.
Apparently, the information got out after the DEO sent a database to Integrity Florida, a nonprofit research group that advocates for ethics reform in the state. Integrity Florida would later forward the information to another nonprofit, which sent it to news outlets around the state.
Now, here we are.
Earlier this 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.
Last year, the Florida Center for Fiscal Policy and Economic Policy released a report (PDF) calling 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.
Until this week, however, no information regarding the state’s economic incentives had been released.
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.
According to Desellate:
Scott took office vowing to call CEOs every day to coax them to move to Florida. But he also likes to brag about not being a spendthrift, from showing off cheap shirts to buying roof tiles in bulk for his Naples mansion ahead of hurricane season.
And with fewer dollars to spend, the average incentive package offered under his watch has been cheaper than those negotiated by his two immediate predecessors — and has led to Florida getting outbid by other states for at least seven major projects.
Scott said in an interview that he had signed deals with businesses faster than his predecessors, and “we’re doing well” luring new companies from out of state.
“The tax incentives are bringing companies here that might have gone elsewhere,” Scott said.
The Times‘ business reporter, Robert Trigaux, noted that the accidental data dump could be a step toward transparency for the program.
Florida talks a good game about recruiting new businesses. In reality, it’s often criticized for lagging behind other states that demand better accountability about all those tax dollars handed out as business incentives. That’s the key finding in a recent report from the Pew Center on the States. It says Florida is the largest among 25 states that has “not taken the basic steps needed to know whether their incentives are effective.”
Now that it is public, this database may let Floridians better judge how well state officials manage tax incentives.
My take? The often out-of-the-public-view process of getting companies to expand here with state incentives turns out to be an incremental game.
However, if this turns out to be the only step, consider it a broken promise.