By Ashley Lopez
Florida Center for Investigative Reporting
A new national report criticizes the use of public-private partnerships for economic development in several states, including Florida.
Good Jobs First, a left-leaning group promoting corporate and government accountability in economic development, analyzed the economic development efforts of four governors in their report—one of which is Gov. Rick Scott.
Since Scott took office in 2010, the state’s public-private partnership, Enterprise Florida, which works to lure businesses to Florida, has been a cornerstone of his economic development plan.
Based in Washington, D.C., Good Jobs First claims that public-private partnerships in Florida and other states “have, by and large, become costly failures characterized by misuse of taxpayer funds, conflicts of interest, excessive executive pay, questionable subsidy awards, exaggerated job-creation claims, lack of transparency, and resistance to oversight.”
Those are the cautionary conclusions of a study issued today by Good Jobs First, looking at eight states with existing PPPs and another one proposed. “Creating Scandals Instead of Jobs” is available at www.goodjobsfirst.org. It is a follow-up to a study issued in February 2011.
“We conclude that privatizing a state development agency is an inherently corrupting move that states should avoid or repeal,” said Greg LeRoy, executive director of Good Jobs First and lead author of the study. “Taxpayers are best served by experienced public-agency employees who are fully covered by ethics and conflicts laws, open records acts, and oversight by auditors and legislators.”
The group’s study also focuses on reports in the media that Enterprise Florida has been facing questions about “shortfalls in the job creation and controversies over executive pay and bonus.”
For years, Enterprise Florida has doled out millions of dollars in tax breaks and subsidies to big companies in Florida in exchange for job creation. However, there has been little to no public disclosure about whether those jobs are actually being created.
This year, a bill was passed aimed at making that process more transparent, but little information has been released as of yet.
Integrity Florida, a non-profit government watchdog in the state, fought to get that bill passed and has said in the past that Enterprise Florida had not been working properly. According to the group, “in 1992, the Florida Legislature created Enterprise Florida with an initial objective of creating 200,000 high wage jobs by 2005 [and eight years beyond its original deadline for job creation, Enterprise Florida is less than halfway to its jobs goal.”
Economic incentives through Enterprise Florida aren’t new in the state, but no other governor has used economic incentives as much as Scott.
The report also notes that even though Enterprise Florida has met a lot of its goals, the state has continued to rely on the PPP to grow the state’s economy and has even doled out bonuses to its executives. According to The Orlando Sentinel:
For instance, it notes that Enterprise Florida CEO Gray Swoope landed a $70,000 bonus this fall on top of his $230,000 salary. He is slated next week to get a raise to $275,000 — and the allowable bonus increased to $100,000 next year.
Despite the bonuses, Florida’s track record with incentives awarded has been spotty. Since 1995, roughly two-thirds of the jobs promised when incentives for corporations were announced never materialized. Last spring, lawmakers cut funding for incentives from $111 million to $45 million although Gov. Rick Scott and EFI had lobbied for $278 million.
EFI “is out state’s most glaring example of cronyism and institutional corruption,” Dan Krassner, with the watchdog group Integrity Florida, said in a conference call on the report Wednesday.
EFI has for months called Krassner’s criticisms inaccurate and off-base.
Good Jobs First concluded in its report that “the privatization of economic development agency functions is an inherently corrupting action that states should avoid or repeal.”
“With a soft economy and the ‘economic war among the states’ already dominated by corporate interests, taxpayers are best served by experienced public-agency employees covered by ethics and conflicts laws, open records acts, and oversight by auditors and legislators,” the group said in a press release.
For more on Enterprise Florida, you can read more of FCIR’s reporting on the agency here.