1. Opinion

Corporate handouts need accountability

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Published Apr. 28, 2012

A new state law gives Gov. Rick Scott unprecedented discretion to steer $86 million in public money to private companies that promise to create jobs. Now it's Scott's job to ensure that every penny of that taxpayer money is accounted for and wisely spent, which would be a sharp departure from the past. A pair of new reports highlight just how bad Florida has been at making private companies account for the government handouts they receive. It's Scott's job to change business as usual.

Florida is far from alone in giving away public money to private enterprises without tracking whether job guarantees are met. A new report from the nonpartisan Pew Center on the States found 25 states have no significant criteria for evaluating whether businesses deliver on promises of jobs or investment in exchange for incentives such as tax refunds, workforce training dollars, donated land or cash. Even the 13 states that do a better job on accountability are just getting started. Oregon, for example, now requires lawmakers to reauthorize programs every six years.

Another report by Integrity Florida, released last week, focused on the lack of accountability at Enterprise Florida. The state's public-private economic development agency hides behind public records exemptions, making it all but impossible to timely evaluate the appropriateness of tax incentives or contracts granted, including those to companies whose executives sit on Enterprise Florida's governing board (which requires a $50,000 donation).

What little accountability there has been in Florida is far from reassuring. Just last year, records requests by the Tampa Bay Times and other media outlets revealed the state has done a pitiful job of keeping tabs on businesses that get state money. Over the past 15 years, only one-third of the 1,500 tax incentive contracts actually resulted in employing the number of people promised. The state shelled out 43 percent of the committed dollars. And a recent inspector general audit of the Department of Economic Opportunity's tracking system found serious issues, including that the agency's consultant never had any training and didn't secure proprietary business records.

Scott's administration promises to do a better job. Indeed, the recent bad news that a once high-flying Ybor City tech firm was behind on its payroll had one bright spot: At least local and state governments had not paid a penny of $2.65 million in incentives promised to Savtira Corp. Why? The money was contingent on the creation of 265 good-paying jobs.

But an embarrassing deal in Panama City suggests there is still much work to be done. As the News Herald reported this month, the region's economic development officials last year helped inflate the application numbers for Redpine Healthcare Technologies and apparently withheld damaging financial details from Bay County commissioners. The county provided $350,000 to match the state's $400,000 in up-front cash. Another $4.4 million was promised if 410 jobs were produced in three years. By December, the firm was shuttered. Now Attorney General Pam Bondi is suing to get taxpayers' money back.

The Legislature could have helped fix this lack of transparency this year by requiring that public records exemptions on these deals expire before public officials vote to spend the money. They improved the exemptions a bit, but they didn't go nearly that far. Now it's Scott's job to lift the veil by at least implementing a credible tracking system and being more open about how he spends the public money that he controls. After receiving unprecedented authority over such a huge pot of taxpayer dollars, he has an obligation to account for each penny. Anything less is an insult to taxpayers.