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Venture

Robert Trigaux

Florida fares better than most states in business incentives, not so well in public disclosure

15

December

scotttimewarner500jobsannouncedapphoto.jpegWake up and good morning. A 51-state "report card" study published this week by the Good Jobs First research group in Washington finds that states spend billions of dollars per year on corporate tax credits, cash grants and other economic development subsidies that often require little if any job creation and lack wage and benefit standards covering workers at subsidized companies.

(In the AP photo (left), Gov. Rick Scott speaks at a news conference at the Florida state Capitol in Tallahassee as Time Warner Chief Financial and Administrative Officer John Martin listens on Sept. 20. )

So says the study called Money for Something: Job Creation and Job Quality Standards in State Economic Development Subsidy Programs. Here's the link to a summary. And here's the full report.

And how did Florida do in the study? After all, it was only a month or so ago that Florida's program that provides tax-dollar incentives spent on promised jobs got taken to the cleaners for weak bookkeeping and accountability (read more here). Nevada, North Carolina and Vermont were found to do the best job in applying job standards to their major subsidy programs. The District of Columbia, Alaska and Wyoming rated worst.

The Good Jobs First study gave Florida the grade of C, though the Sunshine State still ranked 8th (in a tie with Rhode Island) in a national ranking. So the C grade suggests Florida is not doing very well but is still doing better than the vast majority of other states.

Four of Florida's five state subsidy programs examined setting wage requirements for the jobs created, although none required employers to offer health benefits. Fewer than half the individual subsidy programs analyzed had no such wage requirements nationwide. Fewer than one-fourth included health-care subsidies -- an area where Florida "got dinged," the Orlando Sentinel notes.

Here's why that matters, explains Good Jobs First research director Philip Mattera: "Unless you have those requirements, subsidized employers could wind up creating substandard jobs. In those instances, low-wage employees are often still dependent on publicly funded health-care programs such as Medicaid, and, as he tells the Sentinel, "in a sense then, taxpayers are paying twice."

While Florida placed in the top ten for "best performance standards" (8th), it was nowhere to be found in the top rankings of states for "best subsidy disclosure" -- meaning Floridians cannot track the accountability of the state as well as many citizens elsewhere in the country.

In September's Time Warner deal, here's what incentives were offered. About $3 million in state and local tax incentives were a big part of the company's decision to move to Hillsborough. The incentive package includes $1.2 million from the state's qualified target industry program, $900,000 from the state's Quick Action Closing Fund, $500,00 in state workforce training funds and $450,000 approved on Sept. 8 by elected Tampa and Hillsborough County officials.

It's good timing for the study. Florida Gov. Rick Scott seeks $230 million in his 2012 budget for business incentives for his newly created Department of Economic Opportunity.

Read more coverage from the Venture blog here and coverage from the St. Petersburg Times here.

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

[Last modified: Thursday, December 15, 2011 9:29am]

    

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