Saturday, June 23, 2018
Business News

When it comes to recruiting businesses with taxpayer funds, Florida should be pickier

When it comes to recruiting businesses to Florida, maybe the state should be pickier.

One recent and expensive fumble involved a software company called Redpine Healthcare Technologies, which relocated its headquarters from Spokane in Washington state to Panama City last summer.

Only five months after taking $750,000 in state and local tax incentives and promising to create 410 jobs averaging $49,155 a year, Redpine shut its doors. The five people that Redpine did hire never got their last paychecks, the Orlando Sentinel reported on its front page last week. That works out to an average $150,000 a month of Florida's money spent by Redpine, with little to show for it except a defunct business.

"Shutting down a company that you put over six years of your life into s - - - s," former Redpine chief executive officer Shad Wheeler complained in a Dec. 13 remark on his Twitter page. Then he added: "Looking forward to getting a new job that will (give) me the ability to buy new gear and hunt more this coming year."

Sorry, Shad. Hunting trips may have to wait. Two weeks ago, Florida Attorney General Pam Bondi's office filed a lawsuit in Leon County to try to recover the $400,000 in state money handed to Redpine. Bay County, home to Panama City, is also claiming breach of contract and scrambling to recover at least part of the $350,000 it gave Redpine based on the state's apparent thumbs-up on the relocation.

Curiously, Redpine had little public track record and received scant media attention in Spokane before Florida so eagerly opened its wallet and put out the Panhandle welcome mat.

Who's vetting the companies Florida's trying to recruit with tax money?

In a state news release last summer touting the recruitment of Redpine, Gov. Rick Scott said he was "nurturing a business climate that encourages business expansion and job creation."

He should also nurture more accountability. According to the Sentinel story, the state had no idea that Redpine was shutting down until a Panama City newspaper reporter called in early December.

Business recruiting using Florida taxpayer money as bait is a percentage game. Not every company attracted to Florida with public funds will be able to generate the specific number of "high-wage jobs" that are inevitably promised in such deals.

The key is for Florida to have a lot more successes than failures in recruiting businesses that deliver on their jobs promises.

From 1996 through 2011, Florida officials had promised $1.75 billion to companies that said they would create 224,286 jobs. Only about a third — 73,669 — of those jobs ever happened, so the state ended up doling out only about $738 million.

In some cases, such as with Redpine, Florida uses taxpayer money from its Quick Action Closing Fund as an extra sweetener to (as the name says) close a deal by giving a recruited company money up front.

In other cases, the state provides tax credits to recruited companies only after they have delivered on their commitments to create a certain number of jobs that pay a certain wage.

In January, Florida received a "C" score in a report on economic development incentives by Good Jobs First, a nonprofit resource center in Washington, D.C. The report looks at online disclosure, transparency of incentive programs and tracking of actual job creation.

No state received higher than a B-. But Florida would do well to raise its mediocre grade by the next report and save some taxpayer money in the process.

Information from Times wires was used in this column. Robert Trigaux can be reached at [email protected]

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