Wednesday, September 9, 2015
TALLAHASSEE, Fla. – Last week, the Sun-Sentinel published an editorial that omitted, mischaracterized and misrepresented key facts regarding Enterprise Florida.
The editorial hinges its argument on Digital Domain. However, Digital Domain was not an EFI project. Instead, in 2009 the company subverted the vetting process and was appropriated funds using budget proviso language. Digital Domain is an example of WHY EFI and DEO’s current incentive process is so important, a point the Sun-Sentinel completely misses.
Enterprise Florida, in conjunction with the Department of Economic Opportunity, maintains an open and transparent system of economic development that creates jobs and opportunities for Floridians with a great return on investment for taxpayers. Simply put, if a company doesn’t hit their job creation goals, they don’t receive their incentives. Period.
Below are additional facts to counter misleading claims made by the Sun-Sentinel in their Editorial “Open the books on bonuses, deals”.
CLAIM: “The problem with Enterprise Florida isn’t too little money. It’s too little explanation of how Enterprise Florida spends its money.”
- FACT: Every project that Enterprise Florida and DEO incentivize is published and posted online in a detailed and transparent manner.
CLAIM: There has been insufficient reform to prevent another Digital Domain.
- FACT: Digital Domain was not an EFI project. Instead, in 2009 the company subverted the vetting process and was appropriated funds using budget proviso language. Digital Domain is an example of WHY EFI and DEO’s current incentive process is so important, a point the Sun-Sentinel completely misses. Since Governor Scott took office, a core principle of the state’s economic development incentive program is that businesses are paid based on verified performance. Tax dollars are not paid until job creation and/or capital investment numbers are audited and confirmed. This protects taxpayer investments. In addition, all incentive agreements have sanction and clawback provisions. This administration is committed to holding companies that receive incentives accountable to taxpayers.
CLAIM: Under Scott, the executive branch has much discretion. Because of legislation he sought in 2011, the governor has almost full control over economic development.
- FACT: Legislation in 2011 created the Florida Department of Economic Opportunity, which merged three state agencies into one. The state agencies that existed before DEO also reported to the executive branch, just as DEO does now. The Governor has no more or less power than before.
CLAIM: The governor can spend up to $2 million without asking the Legislature. He can spend another $5 million simply by notifying the Legislature.
- FACT: According to Florida Statute 288.1088, incentive deals up to $2 million need approval by DEO and the Governor. Deals between $2 million and $5 million (not an additional $5 million as stated) require consultation with the Legislature. Consultation is not “simply notifying” the Legislature but a written description and evaluation of each project recommended for approval. The Legislative Budget Commission, Speaker of the House and President of the Senate have at least 10 days to object. If there is an objection, according to the statute, the deal is voided.
CLAIM: “The latest DEO annual report cites “contracted” jobs and “expected” investment from state incentive deals, but offers no long-term look at how reality matches the promises made at press conferences.”
- FACT: This is simply false. All information about each incentive is available on the DEO Incentive Portal, which gives promised job numbers and capital investment required to receive incentive payments. In addition, DEO published an annual incentive report that provides specific confirmed results for each incentive program. Jobs are not immediately created when a project is announced because many companies are making long-term investments that could require time for the construction of buildings, infrastructure or the fulfillment of local, federal or other regulatory permits and requirements. Incentive agreement requirements are typically phased-in and met over multiple years, and performance is measured and verified annually to ensure progress. An independent, third-party firm validates all incentive performance claims. Most agreements contain between five to ten years before all jobs and capital investment goals are fulfilled.
CLAIM: “Multiple news reports, however, suggest that incentive-based jobs often don’t materialize. Between 1996 and 2011, the Palm Beach Post reported, the state came up two-thirds short on incentives-based jobs. In late 2013, the Tampa Bay Times reported that under Scott only a fraction of incentives-based jobs have materialized. And a 2013 report by Integrity Florida said Enterprise Florida had delivered less than half of its promised jobs.”
- FACT: Again, these reports fail to portray accurate information. When a project is certified and the company announces its job creation commitment, it agrees to meet benchmarks for jobs creation over a certain time period laid out within its contract with the state. Those jobs are not created overnight; sometimes, a company will create hundreds of jobs over a number of years.
CLAIM: “There also are inherent problems in Enterprise Florida’s structure. Among the 64 voting board members are corporate executives who pay $50,000 each for the prestigious seat. Those executives decide which companies get state money. The potential for conflict is clear.”
- FACT: Again, categorically false. Enterprise Florida board members do not vote on any incentive packages. The business development team at Enterprise Florida works with companies who are interested in incentives, and DEO provides extensive due diligence to determine if a company meets the criteria for the incentive. As the article itself noted (although with some clarifications needed), a combination of DEO, the Governor and the Legislature decide which companies get state money, not Enterprise Florida board members.
CLAIM: “At the same time, Senate spreadsheets show Enterprise Florida has not spent most of the public money it has received since Scott took office in 2011.”
- FACT: The money in the incentive escrow account is committed to companies, but the money is not provided to those companies until the company meets their targets. Instead, Enterprise Florida and DEO provide commitments to the companies that the money is safely held in an account, and we provide assurance to taxpayers that the incentives will not be given out until goals are met.
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