An Uncertain Future Ahead for Florida’s Economic Development Programs

While Florida and other Sun Belt states have received plenty of positive press in recent years for their population gains and considerable economic booms, a contingent of Sunshine State legislators aim to strip what proponents argue has been a key driver of that growth.

There's a battle raging currently in Tallahassee between Republican Gov. Rick Scott and members of his own party who want to kill the state's economic development and tourism agencies, Enterprise Florida and Visit Florida, respectively.

Florida’s Republican House speaker, Richard Corcoran, has vowed to disarm the state when it comes to its use of economic development incentives and state-supported tourism marketing. Scott, however, wants to give the two agencies an additional, combined $161 million, WBBH-TV in Fort Myers reported earlier this month.

Corcoran and other legislators who tend to oppose economic development efforts frequently tout that the incentives amount to nothing more than "corporate welfare," and that any gains a state or municipality may experience generally comes at the expense of other states.

Scott, for his part, couldn't disagree more.

“These are just pure politicians in Tallahassee who have completely forgotten who they represent,” Scott told the television station. “They've never been in business and have no idea how business works. They want to lecture me! They have an idea because they read some book, maybe, and they figured it out."

The good news for the second-term Florida governor, as he gears up for the legislative battle: some leading public policy groups in the state tend to agree with him.

Florida TaxWatch Inc., a statewide organization that bills itself as "an independent, nonpartisan, nonprofit taxpayer research institute and government watchdog," notes that the state's economic development and tourism efforts have worked to great effect.

A report on the group's websites states that the state's robust tourism industry accounts for "one of only three sectors creating jobs for Floridians during the early part of the Florida recession. During the U.S. recession, tourism lost the second-least number of jobs on a percentage basis of all the Florida sectors."

Additionally, the group's research notes that should Florida hit 100 million annual visitors —which it says would account for the state's next major milestone—it would create more than 121,000 new jobs.

“Having watched and safeguarded taxpayer dollars being spent and invested for nearly 40 years, I am convinced by overwhelming evidence that these programs are essential components in the toolkit to grow the Sunshine State, but equally assured that proper oversight is as vital as the programs themselves,” Dominic Calabro, Florida TaxWatch's president and CEO, wrote in a February op-ed in Sunshine State News.

While Visit Florida generally serves as the state's main marketing and tourism agency, Enterprise Florida works on broader corporate attraction and retention efforts, including site selection and providing financing assistance.

A January 2017 report from the Florida Office of Program Policy Analysis and Government Analysis noted that the eight different programs offered under the state’s current economic development legislation—a mix of tax credits, tax refunds and grants —showed a mixed bag when it comes to results.

The report specifically notes that while all projects approved for the various incentives have job creation and investment thresholds, some such as the Innovation Incentive Program tend to miss their stated job creation numbers.

Economic development stakeholders frequently note that while tax credits and incentives may not make for a perfect solution, they remain necessary as long as other competing states continue using them to grow and diversify their economies.

To that end, Scott recently announced some of Florida's economic successes, noting that the state was best in the nation for private sector job growth.

“Florida’s strong job growth has consistently outpaced our top competitor states, including Texas, California and New York, and last month our job growth rate outpaced the entire nation," Scott said in a statement last October. “This great news is sending a message across the country that Florida is the best place for businesses to grow and create new opportunities. By creating a business-friendly environment and cutting taxes, we have been able to diversify our economy and put Florida on track to becoming first for job creation.”

While the outcome of the battle between Scott and the legislative faction that aims to topple his economic development efforts is unclear, the state could look to a report that Route Fifty cited last September as a roadmap for its attempts to maximize taxpayer dollars earmarked for private-sector growth.

A February 2016 report from Washington D.C.-based Center on Budget and Policy Priorities notes that states are often off-track with their incentives geared toward job creation.

“To create jobs and build strong economies, states should focus on producing more home-grown entrepreneurs and on helping startups and young, fast-growing firms already located in the state to survive and to grow―not on cutting taxes and trying to lure businesses from other states,” the report says.

The CBPP report's authors conclude that focusing on the method often known as 'economic gardening,' or focusing on the jobs and companies you already have, as opposed to 'hunting,' contributes to "80 percent of total job creation in every state."