Republicans in the Florida House proudly declared they were rooting out wasteful “corporate welfare” in state government to protect taxpayers.
But while they agreed to eliminate tax-credit programs for everything from the state’s job recruitment agency to sports stadiums, they carved out an exception for what is considered the worst tax incentive of all.
Tucked on page 65 of a 187-page bill is a clause that continues to award $2 million in annual tax credits to the World Golf Hall of Fame in St. Augustine for the next six years. Even in their analysis to members, House Republicans called the museum the single worst bet the state is making with tax credits.
The House voted March 10 by a 87-28 vote to kill 24 tax credits — but saved the one paid to the Hall of Fame.
Tucked on page 65 of a 187-page bill is a clause that continues to award $2 million in annual tax credits to the World Golf Hall of Fame in St. Augustine for the next six years.
The bill has become the biggest political battle in Florida politics. Gov. Rick Scott has touted tax-credit programs like the corporate recruitment done by Enterprise Florida as key reasons why the state has added more than 1.2 million private-sector jobs since he was elected. But House Speaker Richard Corcoran and other House leaders say those programs betray their vision of the role of government. Corcoran has argued that the vast majority of businesses don’t get tax breaks, so the state should not be handing them out to a select few.
That hard line against incentives makes the golf museum a curious outlier. It’s located in St. Johns County, which is partly represented by Rep. Paul Renner, the Republican sponsor of the bill. He said the hall’s location didn’t influence his decision to preserve its tax credit.
When asked why the tax credit was left alone, Renner replied: “I don’t know.”
In a subsequent interview with the Herald/Times, Renner said the House did not want to disrupt existing deals with museums.
The World Golf Hall of Fame is run by a nonprofit group called the World Golf Foundation, whose board of directors includes the heads of the PGA, the LPGA and the U.S. Golf Association. The Hall of Fame lists Rolex and Shell as two of its top corporate partners, yet has relied on taxpayer support since its 1998 agreement with the state.
World Golf Hall of Fame President Jack Peter said the facility has never come close to hitting the 300,000 annual visitors mark, but it has increased marketing to attract golfers to Florida. The facility frequently advertises the Hall of Fame during PGA Tour events. He said the promotional value was $6.5 million just last year. Peter said he would like the attendance to grow, but insists the facility is still benefiting the state in promotional value.
Two years ago, Renner was not a supporter. In 2015, he and Corcoran, R-Land O’Lakes, voted for a bill that would have made it harder for the Hall of Fame to get future tax credits because it had failed to meet its attendance goals. It had promised 300,000 visitors a year.
The Legislature’s top budget analyst earlier this year provided the Legislature with a list of 26 state tax programs and ranked them from the best return on investment to the worst. It showed that for every $1 the state invested in Visit Florida, it got $3.20 back in tax revenues. For every $1 the state put into a program that has helped lure companies like USAA and Amazon, the state got $4.40 in return.
Spring training baseball stadiums don’t break even, but the state recovers about 11 cents on every dollar it spends to keep the teams.
All of those incentive programs would be cut or completely eliminated if the House bill becomes law. The Hall of Fame, which the bill preserves, doesn’t come close to breaking even.
For every $1 the state invests in the Hall of Fame, it loses every dollar. And the state still incurs other costs, meaning for every dollar the state invests it gets nothing back and loses an additional 8 cents for every dollar invested. That translates to a loss of $4 million over the life of the 1998 agreement in addition to the $50 million the state paid in tax credits.
The only program listed as doing worse with state tax incentive money was the International Game Fish Association World Center in Dania Beach. That facility no longer gets state funding because it moved to Missouri in 2015. That makes the Hall of Fame the worst of all the tax-incentive programs.
During the debate over the bill last week, state Rep. David Richardson, D-Miami Beach, pointed out that Renner’s bill preserved tax credits to defense contractors, but not to other types of businesses. In another section, the bill cuts incentives to professional sports teams, but allows those to “motorsports entertainment complexes” to continue.
Renner told Richardson that the House tried to “get rid of the worst but retain those that were of some societal benefit.”
Rep. Wengay Newton, D-St. Petersburg, objected to the bill ending tax credits for environmentally contaminated sites in urban areas that rely on incentives to get redeveloped. Newton said the sites don’t recoup all of the money the state spends, but the investment helps revive communities.
Renner acknowledged that the Hall of Fame’s return on investment is poor. He said if the legislation continues to move forward, he would be more than happy to see the credits for the hall get killed, too, even if that puts him at odds with those in his district.
The bill has a difficult road ahead, but one Corcoran insists is still navigable. The Senate does not have a similar tax incentive bill, but Corcoran insists that there are senators who share the bill’s philosophy.
The Senate’s powerful appropriations chairman, Sen. Jack Latvala, R-Clearwater, is not one of them.
“It appears that the House has failed the test of transparency that he [Corcoran] has talked about so much this year,” Latvala said. “There’s a prime example of something that they like that they are protecting for themselves.”
Contact Jeremy Wallace at firstname.lastname@example.org. Follow @JeremySWallace