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Robert Trigaux

Florida business incentives: Does anybody really know what we've spent on jobs?

16

November

departmentofeconomicopportunityflalogo.Wake up and good morning. It all began with a sharp-eyed news story by St. Petersburg Times Tallahassee reporter Michael Bender. In October, he wrote that while Florida has given tax breaks and other cash incentives to companies as big as Wal-Mart, Publix and Kraft Foods in return for creating jobs, even these corporate giants have had trouble meeting job goals.

"New data shows Florida has signed contracts worth $1.7 billion since 1995 in return for promises of 225,000 new jobs. But only about one-third of those jobs have been filled while the state has paid out 43 percent of the contracts," Bender wrote. State data shows at least 327 incentive contracts came up short, producing nearly 35,000 fewer jobs than promised. That includes 33 companies that cut jobs instead of adding work. Here's Bender's original story.

Now it gets more interesting. Florida could not actually say how many jobs were created as part of 971 other projects. But, Bender reported, the data shows those companies have been paid $415 million. They range from Orlando’s Burnham Institute for Medical Research ($155 million) and the University of Miami Leonard M. Miller School of Medicine ($80 million) to SRI International in St. Petersburg ($20 million).

Coverage, citing state numbers, also said St. Petersburg-based Jabil Circuit had received $12.4 million for an unfulfilled commitment to create jobs. Well, that did not sit well with Jabil or the City of St. Petersburg where Jabil's headquarters resides. Jabil never actually received those funds, and the city is anxious not to antagonize Jabil, one of the key corporations based within city limits. 

Last week, the state's Department of Economic Opportunity acknowledged that exact point. Jabil was one of six businesses that several state documents showed had received a total of $23 million but not produced the promised jobs. Since then, the state says Jabil’s cash is actually sitting in an escrow account and has apologized "for the confusion."

The trick is all this is happening at the same time that Gov. Rick Scott’s agency in charge of enticing businesses to create jobs with cash incentives wants another $230 million in 2012, two-and-a-half times more than what lawmakers set aside this year. Read St. Pete Times reporter Bender's coverage here.

But the state legislature is not thrilled with the lousy accounting on state incentives. Scott’s top jobs officials were told Tuesday to find a better way to track tax incentives the state has spent -- or else risk getting less cash next year, Bender reported here Tuesday. "I want us to be nimble, but it has to come with accountability," Rep. Mike Horner, a Kissimmee Republican in charge of the House committee that oversees tax incentives, states in the story.

The unfolding fiasco prompted Orlando Sentinel business columnist Beth Kassab to toss this zinger last week:

"It turns out a virtual clown brigade has been minding the $1.7 billion Florida has promised to companies in exchange for creating jobs and investing in the state. How else do you explain the flow of wrong and misleading information out of the Department of Economic Opportunity in recent weeks?"

Kassab noted that the state's database also failed to include payments or listed inaccurate payments "made on some of the most high-profile deals of the last decade that centered on the state's effort to lure biotechnology and research companies here." Some examples: 

* For the Max Planck Florida Institute in Jupiter, the database listed zero dollars paid. In fact, the state has released $84.09 million to the institute, according to revised figures provided by the agency in response to a Sentinel request.

* It also listed zero dollars for the Charles Stark Draper Laboratory in St. Petersburg, when $13 million has already been paid.

* Amounts listed for the Sanford-Burnham Medical Research Institute in Orlando as well as the Torrey Pines Institute for Molecular Studies in Port St. Lucie and SRI International St. Petersburg also were incorrect, the columnist said.

Yes, some of these miscues can be attributed to Gov. Scott's administration being less than a year old and the two-moth-old Department of Economic Opportunity still getting its feet wet. But "these missteps are symptomatic of a deeper problem," Kassab suggests.

"From the looks of the database, it appears the state's failure to properly track incentive deals and update information goes back for years."

That means we're back into the Crist administration in Tallahassee. At least.

Hey Tally, it's hard to claim economic success when you have no clue where the money's going.

-- Robert Trigaux, Business Columnist, St. Petersburg Times (soon to be known as the Tampa Bay Times.)

 

 

 

 

 

 

 

[Last modified: Wednesday, November 16, 2011 7:39am]

    

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