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Florida tax incentive programs creating 1 out of every 3 jobs promised

TALLAHASSEE — Florida has given tax breaks and other cash incentives to some of the world's biggest companies in return for creating jobs.

But even Walmart, Publix, Kraft Foods and other corporate giants have had trouble meeting job goals.

New data show that 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.

That averages out to $10,237 per job.

"Hopefully we'll learn some important lessons," said Rep. Mike Horner, a Kissimmee Republican whose budget committee controls economic development money.

Information on the performance of Florida's incentive programs comes as Gov. Rick Scott prepares his budget request for new tax incentives next year. At least $125 million will be available in a fund lawmakers created for incentives.

State data show that 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.

A pair of Tampa Bay companies were among the biggest losers.

• Household International in Hillsborough County was given nearly $100,000 as part of a $9 million contract to create 520 jobs in a call center expansion. Instead, the company lost 233 positions.

• In Pinellas County, ABR Benefits Services received about $175,000 as part of a $4 million contract to create 900 jobs. Instead, just 204 were created.

The state was unable to say how many jobs were created as part of 971 other projects. But the data show that those companies have been paid $415 million, including Orlando's Sanford-Burnham Medical Research Institute ($155 million), the University of Miami Miller School of Medicine ($80 million), and SRI International in Pinellas County ($20 million).

Many of the roughly 1,500 incentive contracts the state has signed include tiered payments so companies aren't paid until jobs are created.

Scott wanted $300 million in cash incentives this year. Instead, legislators gave him $93 million, the ability to sign contracts without legislative oversight and created the Department of Economic Opportunity to help streamline business development programs.

Scott's new department insists it is reviewing the millions in cash incentives the state has given out and will recommend taking action against businesses not fulfilling their contracts.

The department has identified at least six companies that received a total of $23.4 million without fulfilling promises for 3,260 jobs and $273 million in capital investment.

State officials confirmed late Monday that they are attempting to renegotiate contracts with the companies, including a 2008 deal with Jabil Circuit, a St. Petersburg company that posted record revenue of $16.5 billion this year.

"By working with these companies, DEO can help a Florida employer stay in good standing while simultaneously setting definitive measurements to create jobs — putting Floridians back to work," DEO spokesman James Miller said.

Scott is also seeking tax breaks for businesses that could be worth as much as $33.4 million in the next state budget and $107.6 million the following year.

Democrats are already questioning Scott's proposal, which is significantly less than the $1.7 billion in cuts he asked for this year.

"The last thing we would want to do is just have a CEO pocket the money and just say 'thanks for the cash,' " Rep. Evan Jenne, D-Dania Beach, told Scott's office during a House Economic Affairs Committee last week.

Some of the largest companies in the world are getting incentives but coming up short in job goals.

• Walmart, the biggest corporation in the United States, has received $7.5 million for projects in nine counties, including Pinellas and Miami-Dade. The state did not release job information for four of those projects. Of the other five, three produced more jobs than promised, one failed and another has yet to reach the jobs goal.

• Publix Super Markets, the largest company based in Florida, has signed contracts worth $2 million with the promise of 802 jobs. The biggest contract, $1.5 million for a project in Charlotte County, was vacated. Two other contracts were completed. In Miami-Dade, Publix produced 110 jobs at its Biscayne Commons store instead of 100 and was paid $250,000. But for a retail store in Pinellas County, the company came up 12 jobs short of its promise of 80 jobs. The grocery received $164,375 of the $200,000 contract, according to the state data.

• Countrywide Home Loans won a $2.76 million contract with the state in the midst of the housing bubble. The company did not create any of the 920 jobs it promised, and the state paid out no money.

• Kraft Foods got $116,566 from the state for 58 of the 107 jobs it promised in Miami-Dade. The initial contract totaled $428,000.

• Walgreens received $33,500 for a project in Orlando, but ended up losing 23 jobs instead of creating 69. The state terminated another $1.8 million contract with the company for a project in Palm Beach County, which had met just a fraction of the 610 jobs promised.

Michael C. Bender can be reached at mbender@sptimes.com or (850) 224-7263. Follow him on Twitter @MichaelCBender.

What about the jobs?

The state of Florida is renegotiating contracts with these companies after the businesses were paid incentives and failed to meet job creation goals.

• Jabil Circuit Inc.: $12.4 million to create 854 new jobs in Pinellas County. Jobs created: 0.

• Gartner Inc.: $1.2 million for 400 jobs in Lee County. Jobs created: 0.

• Mustang Vacuum Systems: $540,000 for 125 jobs in Manatee County. Jobs created: 26.

• WellDyneRx: $500,000 for 673 jobs in Polk County. Jobs created: 25.

• Kaplan University: $2 million for 750 jobs in Orange County. Jobs created: 500.

• Piper Aircraft: $6.7 million for 454 jobs in Indian River. Jobs created: 203.

Source: Department of Economic Opportunity

Florida tax incentive programs creating 1 out of every 3 jobs promised 10/24/11 [Last modified: Monday, October 24, 2011 11:54pm]
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