After spending the session peeling back what they deemed was taxpayer-financed “corporate welfare” in the name of jobs, the Florida House returns this week with a plan to replace those programs with a new $85 million economic development fund that gives Gov. Rick Scott exclusive control — and few strings attached.
The agreement, between House Speaker Richard Corcoran and the governor, and signed off on by Senate President Joe Negron last week, paved the way for Scott to sign the $83 billion budget on Friday and call for a three-day special session starting Wednesday.
In calling back legislators, the governor directed them to add $215 million in K-12 funding to the budget, restore $75 million to the tourism marketing agency, Visit Florida, and create an $85 million grant program within the Department of Economic Opportunity. If they pass the bills, many expect the governor to sign Corcoran’s priority legislation, HB 7069, a controversial public education bill intended to expand charter schools by giving them control of the state’s struggling schools.
The economic development bill proposed by the House, HB 1a, will regulate how taxpayer money is used for economic development. It creates the Florida Job Growth Grant Fund within the Department of Economic Opportunity to finance projects that fit broad criteria to help targeted industries: rural infrastructure, transportation projects for local governments and individual training programs at state colleges and technical schools.
The bill says that DEO and Enterprise Florida will “identify projects, solicit proposals, and make funding recommendations to the Governor, who is authorized to approve” them.
There are no restrictions on how the grant money is dispersed except that it “shall not be used for the exclusive benefit of any single company, corporation, or business entity.” Nothing in the legislation requires an audit. There are no application requirements, no job metrics and no mandate that the project show it is developing jobs.
After feuding with the governor all session, many lawmakers were surprised that the House was willing to turn over unfettered control for economic development spending to Scott, and Senate leaders say they may not be ready to accept the House bill entirely.
“It’s important for the governor to have a say in these economic development deals,” said Sen. Anitere Flores, R-Miami. “But the Legislature should continue to have a say on this issue. To say this is a done deal, I wouldn’t characterize it that way.”
Rep. David Richardson, D-Miami Beach, who supported the House’s crackdown on “corporate welfare” chides the House bill as going too far.
“Instead of corporate welfare, we have industry welfare,” he said. “It’s $85 million in a big bucket handed to the governor with no discretion. There should be a lot more oversight.”
For Rep. Paul Renner, R-Palm Coast, the sponsor of HB 1a, the tradeoff is “the subject of compromise.”
“You have to trust the governor that you’ve elected,” he said. “I trust Gov. Scott to do what’s best for Florida.”
Renner led the House effort to criticize Enterprise Florida, Inc., the governor-controlled public-private economic development agency. He claimed that EFI’s system of providing taxpayer-funded incentives to individual companies to bring jobs to the state had uneven success and unfair application.
“We are getting out of the business of asking taxpayers to subsidize private companies and pick winners and losers,” he said Monday.
The House proposal shrinks Enterprise Florida significantly, leaving its operations and marketing arm, but replacing its economic incentives program with the new grant program.
Richardson notes that Scott is expected to run for U.S. Senate next year and suggests he could use the grant money “for political purposes — the governor may want to use the money in regions of the state where he wants to stimulate his political connections.”
Renner responds that the bill requires Scott “to use these funds for things that we know have inherent value — quality infrastructure and first-rate workforce. That’s the check and balance.”
Sen. Gary Farmer, D-Fort Lauderdale, says that the bill lays bare another agenda at play — the desire by Corcoran to meet the governor’s demands for economic development money in exchange for his signing Corcoran’s priority K-12 reform bill, HB 7069.
The economic development “program was just held hostage for the House speaker to get his K-12 reform bill through,” Farmer said. “There is no meaningful economic development reform here now.”
HB 7069 passed by a single vote in the Senate and now overshadows the special session without being on the agenda. It is intended to infuse new money into failing schools by expanding charter schools through a new program called Schools of Hope.
Legislators from both parties told the Herald/Times that they think Corcoran was willing to restore the economic development cuts sought by the governor after Scott agreed to sign the bill. Both Scott and Corcoran have publicly denied such an agreement has been reached.
The bill replaces HB 5501, which the governor said Friday he would veto. HB1a removes some of the accountability measures in the Legislature’s first proposal. For example, it removes a requirement for EFI to enter into a performance-based contract with DEO, which would include annual measurements of the performance of EFI. HB1a also restores a public records exemption removed in the original bill that would have applied to marketing contracts.
Many of the accountability provisions remain in the bill, however. For example, any tourism marketing contracts valued over $750,000 must be reviewed by the Legislative Budget Commission, the House speaker or Senate president within 14 days and, if they object, it may not be approved.
Both Visit Florida and Enterprise Florida Inc. must abide by the state per diem and travel expense limitations, and all their officers and board members must disclose if their corporate entities provide matching funds to the corporation. The salaries of the executives of the two organizations cannot exceed what state law authorizes the governor to receive. And the contracts valued over $500,000 must be posted on the agency web sites.