Nearly every dollar spent on one of Florida’s largest jobs programs is given to large, often out-of-state companies, a new study says, bolstering concerns from the state’s top economist that more should be done to grow small businesses.
Good Jobs First, a nonprofit which studies economic development programs, found in a report released Tuesday that tax credits that are intended to help large and small businesses across the country often go disproportionately to big corporations.
In Florida, 89 percent of the $148.8 million given out through the Qualified Target Industry Tax Refund from 2009-2013 went to companies with more than 100 employees, the study found. The data covers Gov. Charlie Crist final years in office and the first two years of Gov. Rick Scott’s administration, which has emphasized luring jobs from companies based in other states.
“A lot of companies are outside the state. Governor Scott has been so aggressive and public about that. Only Gov. (Rick) Perry of Texas is more aggressive,” said Greg LeRoy, executive director of Good Jobs First. “When you invest in companies that are based in the state, the money has a bigger ripple effect.”
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The study comes two weeks after Amy Baker, the Florida Legislature’s top economist, told a House committee that the state should focus more on helping small businesses, especially since they account for more than half of Florida’s workforce.
That’s essentially the argument LeRoy and Good Jobs First make: Spend money on infrastructure, education and tools to help small business owners thrive, rather than on convincing an out-of-state company to expand in Florida.
“It’s a much less risky strategy,” LeRoy said. “Putting a lot of eggs in a few baskets is risky. When you invest in a lot of little companies, the dollars aren’t very big in any one deal or in a group of deals, but the benefits stay even if a company fails.”
For its part, Enterprise Florida, the public-private partnership tasked with attracting jobs to the state, says it also has programs for startups, women and minorities.
“Enterprise Florida is committed to bringing the best companies, both large and small, to Florida and creating more opportunities for Floridians,” spokesman Stephen Lawson said in a statement.
Dale Brill, a consultant who ran the state economic development office under Crist, says simply comparing the money spent on tax incentives for big companies and small ones doesn’t provide an accurate picture.
Large corporations will always come out on top for one reason, he said: mathematics. Small businesses often have smaller tax burdens, so tax credits are less valuable to them. Plus, he said, entrepreneurs frequently don’t apply for tax credits because they are intently focused on staying in business.
“The last place an entrepreneur or a small business looks for help is government,” he said.
Contact Michael Auslen at email@example.com. Follow @MichaelAuslen.