The Enterprise Zone (EZ) program is the only statewide economic development tool that, in conjunction with private investment, brings new jobs and economic prosperity to distressed areas. Without bold action from the Florida Legislature to update and reauthorize the program, it will expire at the end of this year.
EZs are areas that have a high poverty rate, high unemployment and are characterized as areas with “general distress.” The program encourages businesses to invest in EZs with job and corporate income tax credits or sales tax refunds. The program is performance-based, which means that without the promised jobs and investment, the business doesn’t receive any of the benefits.
Florida has 65 EZs throughout 52 counties. Miami-Dade has the largest EZ in the state classified into three regions: North Central, South Dade and Miami Beach.
There are critics who say the program is ineffective, yet areas such as Blue Lagoon Corporate Park, South Beach, and Wynwood offer the Legislature compelling examples of how the program has worked to develop areas previously lacking in investment.
Miami-Dade County recently conducted a study using statistical data to assess the effectiveness of the program. The report concluded that businesses and residents benefited, not only from the tax rebates and credits received by businesses, but also from the new hires of EZ residents and the associated increase in consumer buying power.
The report said from 2011 to 2013, businesses located in EZs paid out $7.1 million in wages and received $1.8 million in tax benefits for creating 482 jobs (approximately $4 in wages per $1 of tax rebate). As a result, Miami-Dade County has designated the reauthorization of EZ as a critical priority in its legislative agenda.
Paul Bint, CEO of ColoHouse, located in an EZ, has said the program offered significant tax incentives and was one of the key deciding factors in site selection. ColoHouse signed a lease in 2012 that will keep the company in Miami-Dade until 2034.
The Beacon Council and other economic-development organizations throughout the state are proposing various improvements to the EZ program such as providing additional marketing efforts to increase awareness and participation from the private-sector community as well as simplifying the application, review and approval process, allowing unemployed veterans to participate and lowering thresholds for small businesses to receive tax benefits.
We also believe it is imperative to create a mechanism where areas that have achieved the desired outcomes can be removed from Enterprise Zone designation so resources are aimed at areas that need it the most.
We, therefore, urge the Florida Legislature to take this opportunity to update and improve the existing program rather than letting the program expire. Inaction will essentially leave a void in statewide support for encouraging private jobs and investment in areas still in need of revitalization.
Larry Williams, president & CEO, The Beacon Council, Miami