TALLAHASSEE | While Gov. Rick Scott and the Florida House feud over whether economic incentives and tourism marketing are working in Florida, business leaders in Jacksonville and elsewhere are quietly working to find middle ground.
On principle, they agree with Scott.
Visit Florida, a state agency the House wants to eliminate, uses tax dollars to promote Northeast Florida destinations like the Beaches, St. Augustine and the annual TaxSlayer Bowl. Dozens of companies, including Fidelity Investments and Deutsche Bank, agreed to create hundreds of jobs in Jacksonville after being promised incentive dollars that would no longer be available if House Bill 7005 becomes law.
“The issue, in my opinion, is jobs,” JAX Chamber President Daniel Davis said. “And when we bring thousands of jobs to Northeast Florida, it affects every single worker in this community. Whether they live on the Southside or in the Northwest community, they are going to be affected positively by the deals that we are going to bring into this community.”
Where Davis and Scott disagree is on strategy.
Scott has waged a public battle with the House that bodes negatively on the 2017 legislative session that begins in two weeks. The governor has criticized Republican lawmakers who voted in favor of HB 7005 and accused Speaker Richard Corcoran of pushing the controversial proposal because of his own personal ambitions after his term ends in 2018.
In return, House Republicans led by Corcoran have closed ranks and put the bill on the fast-track toward approval. The Senate would need to sign off on any changes before the bill is sent to Scott’s desk to be signed into law or vetoed. But Corcoran could also use the budget to zero out spending on incentives or defund Visit Florida and Enterprise Florida, the other economic development agency he wants to eliminate.
Scott has veto power over the budget. An impasse on these or other issues could cause the session to not end on time or require legislators to return for a special session.
Rep. Paul Renner, R-Palm Coast, is the primary sponsor of HB 7005 and therefore the de facto spokesman for why the House has chosen to phase out most economic development spending in Florida. He said the issue is about prioritizing state spending on things that don’t primary benefit large corporations with already healthy bottom lines.
“We in the House obviously want to see greater prosperity and opportunity, but we want to see it for everyone,” Renner said last week. “And the problem with the way we’re doing incentives generally is it violates some basic principles of fundamental fairness.”
The House said it would redirect economic development dollars to things all taxpayers can enjoy like roads, public safety initiatives and schools. The incentives they would keep benefit under-served small businesses in rural areas and those owned by minorities.
Boosting the House argument are blunders that surfaced under Scott’s administration, like Visit Florida’s $1 million contract to Miami-based pop star Pitbull that wasn’t made public until Corcoran threatened to sue. Renner also points to the Sanford-Burnham Prebys Medical Discovery Institute in Orlando that received $77 million in state funding then announced in 2016 it would pull out of the market. The deal was finalized in 2003 under then-governor Jeb Bush, and the company said it created most of the jobs promised for the money it received.
None of the embarrassments highlighted by House members are directly connected to Northeast Florida. Instead, Davis points to high-profile companies that are making good on their promises in order to reap state incentives.
Incentives are part of the reason why Amazon agreed to build a distribution center in Jacksonville with the promise to create 1,500 jobs. The state agreed to set aside $1.2 million for Amazon from the Qualified Targeted Industry program to provide tax refunds once new jobs are documented and verified.
“The hard work of the mayor’s office and the local government to keep Amazon’s attention and to help us stay on their radar was absolutely critical, and it was the incentives that helped us stay in the ballgame,” Davis said. “It was a very competitive process.”
The Qualified Targeted Industry, or QTI, program is one of 17 incentives that would be phased out under Renner’s bill. Other companies that have signed deals with the state using this and another popular incentive headed for the chopping block — the Quick Action Closing Fund — include Macquarie Group, Anheuser-Busch and Ernst & Young.
Jacksonville Mayor Lenny Curry, who has echoed Scott’s mantra of job creation, made glowing statements about each of these deals when they were announced. He declined to be interviewed for this report.
“This is special for Jacksonville; and all jobs matter, but particularly manufacturing jobs,” Curry said in 2015 about the Anheuser-Busch expansion. “These things don’t happen by accident. … They happen because the state of Florida under the governor’s leadership has made a concerted effort to say, ‘We’re going to keep our taxes low.’ We’re attractive to business, jobs and job creation.”
The chief executives of Enterprise Florida and Visit Florida have recently testified in legislative committees and private meetings about the return on investment that spending on incentives and marketing provides, while promising more transparency and accountability to address lawmakers’ concerns. Davis said he also plans to travel to Tallahassee to meet with elected officials in hopes of modifying the House bill in a way that saves some of these economic development programs.
“There are areas that we can improve,” he said. “So let’s have the conversation. Let’s make it better. Let’s make it more competitive.”
Renner said last week that when it comes to Enterprise Florida and incentives, he will push for the phase-out contained in his bill. However, he is open to considering modifications that allow Visit Florida and its spending on tourism promotion to remain.
“As the bill moves forward, we’ll see whether it makes sense to find some reforms that everybody can agree on so we can continue to perform the best functions that Visit Florida performs while eliminating the worse offenses,” he said.
Tia Mitchell: (850) 933-1321