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Column: Financial incentives help Florida attract jobs

 
Tampa Bay Times
Published May 25, 2015

This week the Enterprise Florida board of directors will meet in Tampa to discuss a host of economic development issues, including how to diversify our state's economy. The Tampa Bay area, like much of the state, has made good progress rebounding from a long and deep recession that hit the region hard.

Led by strong tourism and a recovering real estate market, our state is doing well. But this not the time to be complacent. We have a long way to go in diversifying Florida's economy and making it more resistant to economic downturns.

To do so, we need the support of the Florida Legislature.

When state legislators reconvene in special session on Monday there are a number of important issues on the table, including economic development in our state and the role of financial incentives such as tax credits.

Financial incentives are a powerful and necessary tool for Enterprise Florida, the state's primary economic development organization. Thanks to incentive packages, coupled with aggressive business recruitment efforts, Florida has set records over the last year for business recruitment and capital investments. More than 36,000 new jobs and $2.8 billion in capital spending by new and expanding businesses will boost state and local economies over the next few years as part of our competitive business recruitment efforts.

Yet financial incentives are often misunderstood and viewed by some as unnecessary in an attractive state such as Florida, which has so many assets, including our natural beauty and enviable climate, a business-friendly tax structure and a skilled, diverse workforce.

Such views are shortsighted. It is a simple fact that without incentives, Florida would be severely disadvantaged in the fiercely competitive business of economic development. The competition — Texas, the Carolinas, Georgia and other states in the South and Southeast — have a well-stocked arsenal of incentives as they aggressively recruit new business to boost their economic profile.

Without competitive offerings, Florida quite simply is a nonstarter. If Florida is going to play in the economic development arena, we have no choice but to stock our toolkit with a robust portfolio of financial incentives.

The perennial criticism of financial incentives often neglects to distinguish between how these incentives are managed and what is being done to ensure that taxpayer money is being used in a productive and efficient manner. In weighing the value of incentives we must ask what government is doing to ensure that companies deliver on their promises when signing an incentive agreement.

First, and most importantly, Florida has stringent rules for performance. Incentives are performance-based, meaning companies must create and retain jobs before receiving funds. Also, that the deal be a good one for all parties — Florida taxpayers and the business considering locating or expanding here.

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Incentives cannot make a bad deal good. Supporting a risky venture that has little chance to get off the ground and succeed is not what business incentives are about. But the right incentives can make a good deal an even better one. In that case, it is a win-win for Florida residents and for the companies that choose our state to call home.

The Tampa Bay area is to be congratulated for doing a good job in digging out of a severe recession. I am amazed at what is happening in Tampa's downtown core, as well as what's already happened in St. Petersburg.

Just last week, Gov. Rick Scott joined with area business leaders to announce that Inspirata, a cancer research software company, will create 70 new jobs in Tampa in addition to making a capital investment of $25 million. This is exactly the type of new venture that our state needs to diversify and strengthen our economy.

But Florida is at the crossroads. Will we continue to be a competitive player in the business of economic development? I encourage community leaders to reach out to elected officials to stress just how important financial incentives are for the economic future of our state.

Bill Johnson is chief executive officer of Enterprise Florida. He wrote this exclusively for the Tampa Bay Times.