ECONOMIC DEVELOPMENT

Report calls Florida business incentives “corporate welfare’’

 

A new report blames Florida’s jobs agencies for engaging in ‘corporate welfare’ through tax deals for firms that move to Florida.

Herald/Times Tallahassee Bureau

A government watchdog group and a conservative advocacy group blasted Florida’s government Tuesday for the hundreds of millions of dollars it gives to corporations, blaming the state’s public-private jobs agency for “pay-to-play” cronyism and “corporate welfare.”

A new report by Integrity Florida and Koch brothers-funded Americans for Prosperity highlights several problems with the state’s economic incentives program, which gives tax breaks to companies that set up shop in Florida.

“We’re concerned about the appearance of pay-to-play,” said Dan Krassner, director of Integrity Florida, outlining a number of tax breaks that have gone to politically connected companies and other deals that have failed.

Enterprise Florida Inc. and Gov. Rick Scott, its chairman, immediately hit back, claiming that the organization has been instrumental in bringing high-paying jobs to the state. Enterprise Florida CEO Gray Swoope slammed the report as tainted because it was funded by Americans for Prosperity.

“Integrity Florida has claimed to be a non-partisan, non-profit organization with no policy agenda,” Swoope wrote. “However, a report on economic incentives for job creation funded by a group that so publicly opposes these incentives is deeply troubling.”

Martin Dyckman, a former St. Petersburg Times associate editor and a board member at Integrity Florida, resigned after finding out that the report was funded by Americans for Prosperity. He also said it was “deeply troubling” that AFP sponsored the report, stating that it created “the perception that a well-researched report is an attack by Americans for Prosperity.”

Integrity Florida brushed aside concerns about the funding of its report, saying all of its funders are publicly listed. On Tuesday, the good-governance group focused on the findings of the report during a news conference.

Among the findings:

• Enterprise Florida has failed to meet its job-creation objectives, with companies creating only 103,544 jobs after receiving tax breaks, far short of the 200,000 envisioned by the Legislature in 1992 when EFI was created.

• Enterprise Florida has failed to get 50 percent funding from the private sector, instead relying on 85 percent taxpayer funding to support the public-private partnership

• Enterprise Florida has “the appearance of pay-to-play,” since it receives an average of $50,000 from some of its corporate board members. Those board members also get private contracts to do work on EFI’s behalf as well as tax-break deals processed by EFI.

Slade O’Brien, Florida director of Americans for Prosperity, said Florida’s practice of doling out economic incentives amounts to government manipulation of the free marketplace.

“What’s wrong here is the policy that’s in place,” he said. “Too often, we create winners and losers.”

Several bills in the Florida House and Senate seek to demand more transparency from Enterprise Florida and the economic incentives program. A bill voted out of committee Thursday morning would make Enterprise Florida submit to a slew of new performance reviews moving forward.

Enterprise Florida responded to what it called “troubling accusations” in the report by sending legislative leaders a lengthy letter about the virtues of its operation.

“Through the legislation that you supported two short years ago, Florida now has a seamless economic development team focused on creating jobs for Florida families, increasing capital investment in our communities and providing a significant return on the investment made by the state’s taxpayers,” reads a letter signed by the company’s board.

Miami Herald Tallahassee bureau chief Mary Ellen Klas contributed to this report. Toluse Olorunnipa can be reached at tolorunnipa@MiamiHerald.com or on Twitter @ToluseO.

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