Tuesday, February 5, 2013

Tax Money For Jobs Before Brevard County Commission

VIERA, Florida --  The Space Coast Economic Development Commission is seeking Brevard County taxpayer money in the form of cash payments and Ad Valorem tax abatements for private companies to retain and expand their operations in Brevard County, Florida.  The EDC has dubbed the funding requests with clandestine names such as Project Sanguine, Project Sail, and Project Platinum.


Project Sanguine

The Brevard County Board of County Commissioners will consider on its meeting agenda today whether to adopt a Qualified Target Industry Resolution qualifying Project Sanguine as a qualified targeted industry business.  Project Sanguine calls for a 10-year Ad Valorem Tax Abatement on personal and real property for the company with a total estimated cost to the County of $594,865.70.


In a letter to Brevard County Manager Howard Tipton, the EDC says that it "has been working to retain and expand this laboratory services company in Brevard County" and that "time is of the essence, as the company is considering other locations in for this expansion."


According to documents filed with the Brevard County Commission, the EDC says that Project Sanguine is an existing Brevard County laboratory services company which also has additional locations outside of Brevard.  The existing laboratory was recently purchased by a parent company who is contemplating expansion in other locations.


The EDC added that Project Sanguine is contemplating a 15,000 square foot expansion of its existing facility Melbourne, Florida, which is located in the Babcock Re-Development District. The company is considering hiring 130 employees locally with an average wage of $52,046 within the next year and further expansion over the ensuing two years.  Project spending is anticipated in excess of $1 million on interior build out improvements on the current building and an additional $10 million in new equipment during the next three years.

Project Platinum


The EDC's Project Platinum requests that the Brevard County Commission pay at total of $40,000 in cash over eight years so that United Paradyne Corporation could qualify for Florida's Qualified Target Industry Tax Refund program. United Paradyne Corporation is projected to create 50 jobs with an average wage of $64,000.


Project Sail


The EDC's Project Sail requests that the Brevard County Commission pay at total of $27,000 in cash over six years so that BRS Aerospace could qualify for Florida's Qualified Target Industry Tax Refund program. BRS Aerospace is projected to create 31 jobs with an average wage of $62,100.


Brevard Taxpayer Money For Jobs


Despite the job and private capital projections made by the EDC in return for taxpayer money, the EDC recently washed its hands of any responsibility for its role in securing tax payer money for Blueware when the company fell far short of the EDC's projections of delivering jobs and capital improvements to Brevard.


Florida's Qualified Target Industry Tax Refund


Statewide, both Republican and Democratic lawmakers are becoming fed up with the lack of oversight and accountability when it comes to Florida tax money being handed over to private companies for projected Florida jobs.  


Stung by taxpayer dollars going to companies that didn't deliver, a freshman House Democrat filed legislation in January to provide more transparency surrounding economic development incentives offered by the state.


The bill (HB 563) by Rep. Jose Rodriguez, D-Miami, would require the state to disclose detailed information on jobs promised and delivered through the state’s economic development programs.


Rodriguez said the bill, and a companion expected to be filed by Sen. Eleanor Sobel, R-Hollywood, dovetails with Republican-backed efforts to restore accountability and credibility to the state's economic development incentive efforts.


"In the last couple of years, there have been some questions about whether they are fulfilling their mission," Rodriguez said last Tuesday in reference to a handful of existing incentives. "This bill will allow us to restore some credibility to the process."


A general review
by the News Service of Florida last month of one incentive program, the Qualified Target Industry tax refund, showed that of 1,134 approved applications since 1994, only 432 were either completed or still active.


And last fall, the Department of Economic Opportunity asked legislators to earmark $500,000 to hire outside counsel to try to recoup at least some of the $20 million in incentives doled out by the state to Digital Domain, the animation company created by Titanic director James Cameron that went bankrupt after promising Florida jobs.


Florida is in line with other creditors, though, joining a growing list that includes local and county governments that provided more than $60 million total in land, buildings and other incentives to lure the company to South Florida in 2009.


The company in September announced it was largely shuttering its Port St. Lucie facility, laying off most of the 300 employees who worked there. 


Lawmakers have filed several other measures to try to add accountability in economic incentives. Sen. Dorothy Hukill, R-Port Orange, filed SB 446 in January, which requires companies to post surety bonds to obtain state financial incentives in case they default.


Sen. Andy Gardiner, R-Orlando and chairman of the Senate Appropriations subcommittee overseeing economic development efforts, has filed a measure (SB 406) to set up periodic reviews of all the state's economic incentive efforts.


Gardiner's bill, scheduled to be heard next week in the Senate Commerce and Tourism Committee, would set up a program in the Legislative Office of Economic and Demographic Research to review incentives and their return on investment.  Further, EDR in concert with the Office of Program Policy Analysis and Government Accountability would review each economic development incentive every three years beginning in 2014.


The reviews would address a range of factors including jobs created, salaries, direct and indirect investment and other indicators of success. During a hearing last week, Gardiner told Enterprise Florida CEO Gray Swoope that lawmakers need a detailed accounting of how the state spends its incentive funds.


"It's good to talk team sport but at the end of the day we have to build a budget," Gardiner said.


Rodriguez said the idea of more transparency has support across both parties.


"Many of us in the Legislature are agnostic on whether we should have these types of incentive programs," he said. "But if we are going to have them, we have to do it in a way that is effective and perceived as fair."  



A News Service of Florida article was used for the statewide aspect of this story.


Listen to Bill Mick Live discuss this article beginning at 13:30 into his recorded radio show.