Monday, April 29, 2013

Tax Money For Confusing Florida Jobs Numbers Explained

MELBOURNE, Florida --  When Northrop Grumman announced in March that it was restructuring some of its operations into Centers of Excellence, with the largest move being from its Bethpage, N.Y. facility to Melbourne, a flurry of seemingly conflicting jobs numbers were reported across the U.S.


Last month, Florida Governor Rick Scott's Office reported that over 1000 jobs were coming to Florida.*  But local media in Bethpage, N.Y. reported that only 850 jobs would be lost.   Meanwhile, San Diego, Calif. local media reported that its community was expecting to get 300 jobs coming from both Bethpage and Melbourne. 


To further add to the confusion, the Space Coast Economic Development Commission first reported in March that just over 900 jobs were coming to Melbourne.  Then, a couple weeks later, that number from the Space Coast EDC grew to 1000 when FLORIDA TODAY published its article, Analysis: Northrop Grumman's Melbourne expansion to create 2,500 jobs, where Economic Development Commission Senior Director of Business Development Greg Weiner was quoted as saying, "..this could represent the nation’s biggest single job-creation announcements this year."


Since it doesn't take an engineering degree to compute that 1000 plus 300 is greater than 850, Brevard Times reached out to Northrop Grumman for some clarification.  Northrop Grumman Communications Director Tim Paynter said that 650 positions are moving from Bethpage to Melbourne but 100 positions are leaving Melbourne to the San Diego area.  So Melbourne can expect a net gain of 550 positions over the next 12 to 18 months.  The other 450 positions are a longer-term proposition.  Paynter added that the company views Melbourne as a future high-growth area and that the additional 450 positions are "very achievable."


As for the additional 1,500 "spinoff" jobs calculated by the Space Coast EDC published in the FLORIDA TODAY article, those are jobs projected by the EDC to be created by the local presence of the Northrop Grumman employees.  In other words, more customers at local retail, restaurant, and professional businesses means more retail, server and professional positions for Brevard County residents.  It does not mean that the company will be adding 1,500 sub-contractor employees. 


The actual number of direct jobs that will already be filled by existing Northrop Grumman employees was marked "To Be Determined" in documents submitted to the Melbourne City Council when it voted to award the company a $1.15 million grant over five years along with an additional $474,000 in tax abatements. So the number of high-paying open positions, if any, that existing Brevard County residents would be able apply for is also up in the air.


The obfuscated jobs numbers underlie an ongoing and deep divide between the headline jobs numbers released by the Governor's office, the Space Coast Economic Development Commission, and Enterprise Florida versus the actual number of high-paying, direct open job positions available in the near future to existing Florida and Brevard County residents.


Because the City of Melbourne approved the local grant, the company is now qualified to apply for a match from the Florida Governor's Quick Action Closing Fund for four times the local grant (approximately an additional $4.7 million.)


Although the company already stands to receive over $6 million in combined grants and tax abatements from the State of Florida and the City of Melbourne, and the company previously announced to its investors and employees last month of its planned move to Melbourne, the Space Coast EDC is asking the Brevard County Commission to give the company another $2 million grant over four years and $810,000 in tax abatements over ten years.


The request for additional incentives once again calls into question whether the Space Coast EDC is negotiating for the most amount of jobs for the least amount of taxpayer money or whether it is simply a publicly-funded lobbying organization with the goal to acquire as much tax money for private companies that were already planning to relocate jobs to Brevard without the additional government subsidies.  


According to the Space Coast EDC website, Northrop Grumman holds a seat on the Space Coast EDC Board of Directors and, like many other companies that ultimately benefit from the advocacy of the Space Coast EDC, donates thousands of dollars to the organization by becoming an "investor."   In addition to money from investors, the Space Coast EDC receives most of its funding out of the Brevard County government budget - around $1.4 million annually.


The issue of the grant and tax abatement will be before the Brevard County Commission during its regular meeting on Tuesday, April 30, 2013.


*An additional 80 to 100 Northrop Grumman positions are going to St. Augustine, Florida from Northrop Grumman facilities not located in Bethpage, N.Y.


SIMILAR STORIES:

Northrup Grumman To Add Jobs To Florida's Space Coast

Florida Tax Money For A Bass Pro Everywhere We Go?

Report Rips Enterprise Florida

Tax Money For Jobs Before Brevard County Commission


Contract Controversy Taints Florida Governor's Jobs Campaign


Brevard EDC Cites "Non-Disclosure Agreement" and Confidentiality


Ellis and Weatherman At Odds Over BlueWare Documents

2 comments:

  1. We shouldn't tax businesses at all, not even with property or utility taxes.
    You get better numbers as a result.
    When businesses locate here, as an example, those 550 people will make about $20,000,000.00 in payroll income. The local economy will have to hire another 550 people in restuarants, supermarkets, department stores, lawn care, etcetera to support the 550 Grumman employees totalling about $35,000,000.00 in local payroll incomes.
    Of this, about $15,000,000.00 of it will be spent on sales taxed goods like restuarants, toilet paper, etc. at 6% generating an additional $900,000.00 a year of Florida sales tax paid right into to our Florida Treasury.
    It's a win-win.
    Al Schrader

    ReplyDelete
  2. Thank you for looking into this. There were a bunch or numbers being quoted that did not add up.

    ReplyDelete

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