The selling of Gov. Rick Scott‘s $250 million Florida Enterprise Fund, aimed at revamping the state’s business incentives, continued in earnest Thursday, with promises it would allow for “cleaner deals.”
The No. 2 official of Enterprise Florida, the public-private economic development organization, presented the proposed overhaul to the House Economic Affairs Committee, saying it was modeled in part after a similar $285 million fund in Texas.
“That was instrumental for them because it was a large number that attracted attention,” Chief Operating Officer Crystal Sircy told lawmakers. “It gives us a seat at the table … (otherwise,) we’re not asked to compete.”
But other states have smaller funds, including Georgia’s $46 million program, which was able to woo the Mercedes-Benz automaker to build a U.S. headquarters near Atlanta over Florida.
Sircy said the $250 million wouldn’t be an annual request and is expected to last “several years.”
Moreover, the Texas fund was found to have “doled out hundreds of millions in taxpayer dollars to businesses and universities that never even formally applied for the funds,” according to an audit reported last year by the Houston Chronicle.
“One of the most damning revelations in the audit,” the newspaper said, “found that … $222 million over 10 years went to entities that … were not required to create jobs, including $50 million each to the University of Texas at Dallas and Texas A&M.”
Sircy said Texas’ problem was it offered “cash up front” and waited for companies to perform, then would have to “claw back” money afterward if jobs didn’t materialize.
She still found a mostly friendly audience, unlike across the Capitol. Scott’s proposal came after Bill Johnson, his economic development czar, took verbal thrashings from state senators on his incentive funding requests.
Venice Republican Nancy Detert, an Enterprise Florida board member, and others have taken Johnson to task for asking for more money than they think he needs.
Senate analyses show $112 million in unspent incentive funds, though Johnson, Enterprise Florida’s CEO, previously has explained that is money already committed for projects “in the pipeline.”
The Florida Enterprise Fund would be a “trust fund,” in which money “will remain untouched … until companies under job creation contracts meet their job requirements,” according to Scott.
It would streamline authorization to dip into that fund by requiring any deal needing more than $1 million to get only the approval of the House Speaker, Senate president and governor – not the whole Legislature.
Now, Scott relies on the Quick Action Closing Fund, a pot of cash that he can draw up to $2 million from without legislative approval.
Incentives such as those Enterprise Florida uses are often derided as “corporate welfare”; a recent analysis showed big companies dominate the recipients of such government giveaways. Americans for Prosperity – a conservative advocacy group – also has publicly opposed the new fund.
The panel, chaired by Miami Lakes Republican Jose Oliva, did not vote on the proposal Thursday.