incentive cuts

Incentive cuts could stymie Orlando’s hunt for higher-paid jobs, officials say
Orlando Sentinel
Column: Paul Brinkmann
February 5, 2017
Alan Horne was worried last year about finding a job in manufacturing when he moved back to Orlando where he had gone to high school.
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But he quickly landed a job at a company that had just been approved to receive state incentive dollars to expand in Orlando: Voxx International.
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The incentive program that Voxx used is facing elimination under a bill filed in the Legislature this week, backed by House Speaker Richard Corcoran.
Local leaders say cutting incentives could spell trouble for Orlando’s efforts to add more higher-paying tech, health and professional jobs — as it did in recent years with incentives for Voxx, Deloitte, Verizon and KPMG — to balance tens of thousands of low-paying hospitality and theme-park jobs.
There are many ways to entice a business to locate in your community, said Crystal Sircy, executive vice president at the Orlando Economic Development Commission. The most important issue is ability to hire a trained workforce. But Sircy said competition is fierce, and sometimes cities wind up being equal at the end of a company’s research. If Orlando has no money to offer, while Dallas or Atlanta does, the company probably won’t come to Central Florida, she said.
“To lose the ability to win the competitive advantage, at the end of that competition, would be unfortunate,” she said.
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Every state offers some kind of incentives, and half of them offer cash incentives, said Jay Biggins, a New York- based consultant with one of the nation’s leading site selection companies.
“Public-sector economic-development incentives are built as a pricing strategy,” he said. “Like any other part of your business, relocating has a cost, and helping companies with that cost makes you more attractive.”
Other states continue to offer aggressive cash incentives. Industry observers said lawmakers in other states, such as North Carolina, have tried to end or cut back some of their incentive programs, only to refund them. In 2015 North Carolina replenished funding for its Jobs Development Investment Grant program through 2018, and raised the monetary value of JDIG grants the state can give each year from $15 million to $20 million for most projects.
Bloomberg produced a survey that year that named Texas, Florida and Nevada as the most business-friendly states for relocations, in terms of corporate taxes and incentives. New York, California and Illinois were deemed the least friendly, although those states do offer incentives also.
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The Space Coast also has been relying heavily on incentives to attract companies such as Blue Origin, which has already been approved for a reported $26 million incentive package to build a new rocket factory and employ 300 people at an average of $89,000 salary, and OneWeb, which is in line for about $20 million in various incentives to build a satellite plant employing 250 people.
In Orlando, Voxx executives said an incentive package of $1.4 million from Florida and the city was among the reasons they chose to move their headquarters here from New York.
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