Gov. Scott's incentive-based jobs program still falling short of promises

Only a small fraction of the nearly 48,000 jobs Gov. Rick Scott credits to incentives have been created.
Published October 10 2014
Updated October 11 2014

TALLAHASSEE — Gov. Rick Scott has used tax breaks and other incentives to attract tens of thousands of new jobs to Florida, but after nearly four years, most of the jobs still don't exist, according to state records.

Scott has built his case for a second term largely on the slow but steady improvement in the Florida economy, especially a drop in unemployment and growth in private sector jobs as measured by the U.S. Bureau of Labor Statistics.

As the self-proclaimed "jobs governor," Scott has traveled across the state, promoting new jobs and major capital investment lured with incentive deals paid for by taxpayers.

They include Hertz's relocation of hundreds of workers from New Jersey to a new rental car headquarters in Lee County; aviation engineering jobs at Boeing and Embraer on the Space Coast in Brevard; and Amazon's fulfillment centers in Ruskin, Davenport and Lakeland.

But since Scott took office in 2011, of the 47,746 new jobs that the state has promised through tax breaks, job training grants and other programs to nearly 400 companies, only a small fraction exist as of August 2014, according to the job tracking site maintained by the state Department of Economic Opportunity.

That's even the case for promises made early in Scott's term. During 2011, the administration made deals on 87 projects that promised 9,290 jobs, but three years later, as of August, the number of jobs created was 1,223, or 13 percent of the total.

DEO executive director Jesse Panuccio said most of the projects under the Scott administration are on track, with 85 percent of the jobs having been created by their due date.

"It's really important to distinguish between the time frames that we're talking about," he said.

He added it takes more than a year after jobs are created to fully verify them in the state's compliance review process.

"To do this work accurately, we have to go in and audit books and make sure we're accurate and careful. That takes time," Panuccio said.

• • •

Scott has emphasized his focus on job creation as an area of contrast with Democratic rival Charlie Crist. The jobs program existed when Crist, then a Republican, was in the Governor's Mansion.

But the incentive deal that drew the most attention for Crist was the failed partnership with special effects company Digital Domain. He was widely criticized for pushing the project and its $20 million in state funding through a special budget appropriation. Scott's administration filed suit in July seeking to recoup the dollars because the company never delivered on its promise of 500 jobs at a new animation studio in St. Lucie County.

The Times/Herald reported in December 2013 that the Scott administration pledged $266 million in taxpayer-financed incentives to attract 45,258 new jobs, but at that time the total jobs verified by DEO was 1,939, or 4 percent.

Through August, the verified total was 2,430 jobs, or 5 percent.

DEO, a 3-year-old agency Scott created through a merger of multiple job-creation bureaucracies, launched its job tracking portal with promises of accountability and transparency. Panuccio has told state legislators that it provides "unprecedented access" to each company's progress toward meeting its required job-creation goals.

But the portal also offers plenty of zeroes under the column titled "total cumulative net new jobs confirmed (to date)."

In a Times/Herald interview, Panuccio called the portal "a lagging indicator of performance … a post-, after-the-calendar year, backward-looking review of compliance."

The jobs portal is not the only information hub under Panuccio's control that has transparency issues. He also is responsible for CONNECT, the troubled online system for unemployment benefits that has kept thousands of unemployed Floridians from getting their benefits.

Panuccio emphasized that the state's use of incentives to attract jobs is a small part of the overall economic growth in Florida.

But the incentive program is the one over which Scott and his team of job creators have the most control.

Senate Democratic Leader Chris Smith of Fort Lauderdale wrote a letter to Scott this summer calling the results of the incentive deals "paltry."

"Thus far … the state has shelled out $22,028,680 for a grand total of 1,939 jobs, or $11,361 for each job created — an alarming 4 percent compliance rate," Smith wrote.

• • •

Panuccio noted that for various reasons some companies' hiring prospects falter, forcing the state to put their deals in the "terminated'' category.

Projects on the terminated list in recent months include a Walmart supercenter in Miami-Dade, a candy factory specializing in pralines in Pensacola, and Environmental Services Sales and Marketing, which planned a Tampa call center. None of the 407 jobs promised in those projects have been created.

Some projects were terminated even though jobs were created, including incentives tied to Sam's Club in St. Petersburg. Although the company created 104 of the 120 jobs promised, it did not meet capital investment, documentation and wage requirements, losing out on $300,000 in state incentives.

Other firms, like Embraer, have contracts that allowed them to construct new facilities before hiring employees.

Scott traveled to Melbourne last year to celebrate the Embraer contract, and returned Thursday for the groundbreaking of its aircraft factory.

"Embraer's creation of 600 jobs is great news for Melbourne families and the surrounding community,'' he said in a news release.

What Scott did not say: None of the 600 jobs has been filled.

Embraer's $8 million state contract calls for hiring new employees starting with 50 by Dec. 31, 2016, and fulfilling the commitment by the end of 2019.

• • •

A state-of-the-art sawmill in Suwannee County further illustrates the slow pace of new jobs.

In June 2011, Scott heralded the project in a rural area midway between Tallahassee and Jacksonville. Klausner Holding USA, a U.S. subsidiary of a German company, was offered $5.1 million to create 350 jobs, but a string of obstacles led to long delays.

Suwannee County Administrator Randy Harris said recently that heavy summer rains delayed construction even further, but that the project is almost done.

"They are working very aggressively at that site on their facility, so I would anticipate that they should be open for business by year's end," Harris said.

Harris said the prospect of above-average salaries and up to 86 jobs in the first wave of hiring is good news for the area.

Gartner, an information technology company with an office in Fort Myers, has created 46 of 200 jobs promised in a 2011 deal that included $1.7 million in incentives, and the firm agrees to hire another 400 people under a second, $3.1 million contract.

"There's a great talent pool, both new entrants to the workforce and experienced hires currently in the area or migrating to the region," said Gartner spokesman Andrew Spender.

The success stories include PricewaterhouseCoopers, the global professional services firm that has brought 160 of its promised 200 jobs to Tampa, according to company officials. It established a client support center in Tampa as part of its global effort to centralize operations.

"Certainly the incentives were an important part of helping the final decision to bring that delivery center to the Tampa Bay area," managing partner Mike Quackenbush said.

CareCentrix, a home health care company, has created 215 jobs in Hillsborough, nearly twice the 110 it promised.

But about 50 other companies that signed incentive deals in 2011 have not yet produced a single state-verified job, according to DEO data.

Among them is the Boeing Co., which deferred questions to the state about an incentive deal of $6.6 million in benefits in return for 550 jobs.

Boeing recently landed a large NASA contract to build the nation's replacement for the space shuttle to transport humans into outer space, but company officials have said they were reluctant to hire new employees in Florida until they were sure of the contract's status.

Boeing rewrote its state incentive deal last year and now has until the end of this year to create 140 jobs, part of its 550-job commitment by 2017.

Contact Steve Bousquet at bousquet@tampabay.com and Tia Mitchell at tmitchell@tampabay.com. Follow @SteveBousquet and @TiaTimes.

 
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