Speaking at the Enterprise Florida board meeting in Orlando on Thursday, Gov. Rick Scott fleshed out his proposal to give Enterprise Florida more flexibility to help bring companies to the Sunshine State.
Last week, in Tallahassee, Scott said reforming Enterprise Florida would be one of his chief legislative items in the upcoming regular session.
“We must reform our competitive jobs program," Scott said last week. “We will focus on ... making major reforms to our competitive jobs program. The Quick Action Closing Fund that EFI uses to attract competitive projects to Florida over other states is almost bankrupt. It was given very little funding during the last legislative session and now there is virtually very little money left for Florida counties to use when competing against other places in the country for big job wins.
“The current Quick Action Closing fund needs to be reformed, plain and simple,” Scott continued. “Florida cannot compete with Texas for major headquarters projects if we are running out of cash before the end of every year, or if projects are totally dependent on the scheduling of special committee meetings.”
The governor said he had received input from legislators and business groups on reforming Enterprise Florida and insisted these changes were needed.
“Florida should be the next state where all the corporate offices move to,” Scott said. “We’ve got to have a major revision of economic incentives.”
On Thursday, Scott announced four reforms he wanted to see the Legislature adopt: the creation of a $250 million Florida Enterprise Fund; ensuring the new fund would be “where incentive fund dollars will remain untouched in the state treasury until companies under job creation contracts meet their job requirements" to “allow the state’s investment to accrue more interest than the current escrow account;” changing the process so that any Enterprise Florida project costing more than $1 million would need the approval of just the governor, the state Senate president and the speaker of the Florida House; and mandating a 10 percent annualized return of the original incentives while ending special waivers.
Scott made the case for why those reforms were needed at the Enterprise Florida event in Orlando on Thursday.
“EFI’s toolkit was significantly underfunded this year and we will run out of funding for new job commitments before the end of the fiscal year. Meanwhile, our competition for job projects has plenty of funding: New York -- $150 million; Texas -- $90 million; South Carolina -- $58 million; Georgia -- $46 million; and Arizona -- $20 million,” Scott said. “If we fail to reform this year, businesses and jobs will not move to Florida. This is why I am announcing today that I will ask the Legislature to make four major reforms in the upcoming legislative session to fix the broken, nearly bankrupt Quick Action Closing Fund and allow Florida to compete again.
“We must phase out the nearly bankrupt Quick Action Closing Fund and create a new $250 million competitive fund to compete against the Texas Enterprise Fund. Texas is our No. 1 competitor for job wins, and to acknowledge that, I want to call our new competitive fund the Florida Enterprise Fund,” Scott added. “With the creation of a new Florida Enterprise Fund to compete with the Texas Enterprise Fund, we can start talking about economic development in different terms. We must talk about the benefits of economic development deals the same way families talk about their own investments. Families who have a bank account receive a rate of return of 1-2 percent annually. If another bank offered a 5 percent interest rate, everyone in this room would put their money there in a heartbeat.
“That’s why we will ask the Legislature to create the new Florida Enterprise Fund,” Scott continued. “In that fund, if a deal over 10 years generates a 10 percent per year return and the state gets a 100 percent return on the initial investment, we will do the deal. If it can’t make that return for taxpayers, we won’t do the deal. With the right resources and an improved deal-making process, Florida’s opportunities for jobs are limitless.
“Following my trip to Kentucky, and the recent discussions on incentives in the Legislature, it’s more important than ever to me that Florida not become complacent again,” Scott concluded. “Should another recession ever hit, I don’t want Florida to ever again dip into double-digit unemployment. Our families cannot afford it.”
Last week, Scott said he was “very optimistic” that the Legislature would back the reforms.
But there is certainly some resistance in the Florida Senate. Earlier this week, at a Transportation, Tourism and Economic Development Appropriations Subcommittee meeting, senators from both parties grilled members of the Scott administration and insisted Enterprise Florida had been sitting on more than $110 million over the last four years and had more than $140 million in escrow for projects down the road. The Senate has expressed support for setting aside money for already approved projects and as future incentives.
Reach Kevin Derby at kderby@sunshinestatenews.com or follow him on Twitter: @KevinDerbySSN
