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MEDIA ADVISORY: UNDERSTANDING FLORIDA’S ECONOMIC DEVELOPMENT PROCESS

Dec 10 • 183 Views • View Comments

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Statement from Secretary of Commerce and President & CEO of Enterprise Florida, Gray Swoope: “Recent articles take a narrow and shortsighted approach to understanding economic development in the state. The facts and numbers tell us that Florida’s economic development programs are not only working to win competitive job creation projects but they are also protecting the investment of our tax payers. We have elevated Florida’s professional approach to new levels.

 

“While the projects Florida has won are contracted to meet job creation benchmarks over several years, you can see progress in communities throughout the state today. Companies such as Navy Federal Credit Unionin Pensacola, Johnson & Johnson Vision Care in Jacksonville, Verizon in Lake Mary, Amazon in Lakeland and Hillsborough County, Harris Corporation in Melbourne, Hertz in Estero and Univision in Miami are all investing hundreds of millions of dollars in building new and expanded facilities. Beyond the investment in our communities, these projects are already generating new jobs in construction and services, and will create thousands of jobs over the coming years.

 

“Enterprise Florida is committed to working every day to bring new job opportunities to Florida. With our partners at the Department of Economic Opportunity and Workforce Florida, and our 67 economic development stakeholders, we are actively pursuing projects in and out of the state, nationally and globally, large and small, to create jobs for Floridians. We know economic development works in our state and we will continue to responsibly use the tools available to encourage the establishment, expansion and retention of business in Florida.”

 

FACT: BEFORE GOVERNOR SCOTT, FLORIDA WAS NOT COMPETITIVE

  • When Governor Scott took office in January 2011, Florida had its highest unemployment rate since 1970.
  • The state had lost more than 800,000 jobs in four years and unemployment had risen from 3.5% to 11.1%.
  • The state suffered from the perception that it was not business-friendly.

 

FACT: TODAY, FLORIDA IS WINNING ON COST, TALENT & COMPETITIVENESS

  • Florida’s business-friendly policies and EFI’s efforts have resulted in an increase of competitive jobs projects established, private-sector jobs created and capital investment.
  • Over the last two years, EFI has seen a dramatic increase in projects:

o   Number of Projects – 173 for 2012, a 40% increase over 124 projects in 2010.

o   Capital Investment – $1.75 billion in capital investment, a 95% increase over $900 million in capital investment in 2010.

o   New Jobs – 19,789 new jobs contracted, a 74% increase over 11,398 new jobs contracted in 2010.

  • Nearly 21% of EFI’s projects in 2012 included a retention component to ensure that jobs already in Florida, stay in Florida.

 

FACT: INCENTIVES WITH DUE DILIGENCE WORK

  • Incentives awarded to businesses and local governments are based on meeting performance criteria benchmarks throughout the duration of their agreements with the state and each agreement contains important provisions to protect taxpayer funds.
  • Incentive contracts are often 5 to 10 years in length – meaning many of the projects announced by Governor Scott today will not be complete until 2018 and beyond.
  • In 2012, EFI enlisted the assistance of an objective third-party group – Ernst & Young – to review Florida’s incentive programs from 1996 through the first quarter of 2012. Conclusions from the report include:

o   The average annual wage for new jobs created by projects included in the E&Y analysis was $53,169, nearly 28% greater than the $41,633 average annual wage required for these jobs.

o   Completed contracts required an average of five years to move from contract execution to completion. Over the life of the contract, the associated project, on average, was required to verify the number of jobs created in Florida 4.9 times and received 4.8 payments from the state.

o   Currently active contracts are on track to create more jobs than required by the state.

o   Inactive projects achieved 59% of their job creation targets and 42% of their required capital investments.

o   There were 441 terminated contracts. These projects failed to meet contract requirements or withdrew from the incentive program and never received a state payment.

 

FACT: EFI IS COMMITTED TO PROTECTING TAXPAYERS

  • All of Florida’s incentives are performance based – protecting taxpayer dollars.
  • Florida has some of the best compliance and metrics of its incentive program anywhere in the country, and accountability measures are in place to ensure taxpayers receive a return on their investment.
  • Payments are made, or credits are awarded, only after performance criteria are met or after a business investment is confirmed.
  • Most approved incentives fall into the Qualified Target Industry Tax Refund, which is provided to create high wage jobs in targeted high value-added industries. No cash is paid to companies up front in this program.
  • Since 1995, there have been more than 1,600 economic development transactions representing 1,100 projects. Eighteen total projects have returned more than $14 million as a result of clawbacks and sanctions, which still positively impacted the state economy by contributing hundreds of new jobs and millions in capital investments.
  • Just three separate projects fall under the definition of “failure,” meaning that state funds were paid, no jobs were created and no money was returned to the state. They were all Quick Action Closing Fund projects, and represent less than one percent of all incentive transactions. This results in a 99% success rate for this program.

 

FACT: AN ONGOING COMMITMENT TO TRANSPARENCY

  • The Department of Economic Opportunity’s portal provides unprecedented transparency to economic development incentive information – posting information 48 hours after it is no longer confidential.
  • EFI supported legislation to accelerate the release of confidential jobs project information from a year to 180 days.

 

 

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