News Section: Opinion
Scott's Enterprise Florida Trophy Lacks Luster
Enterprise Florida has more sink than swim and losses over wins, yet the governor continues to parade it as a victory trophy. What's really going on? Is this glitterati drowning out the sucking sound of fleecing at a grandiose scale? Because when we take away the hype, we find that our wallets are only getting lighter.
In a recent speech given at Benderson Park, in Sarasota, Florida Governor Rick Scott said, "This is the best vacation spot, in the best state, in the best country in the whole world!" If so, why does the state have to pay corporations to operate here?
Last December, The New York Times reported that Florida spends $4 billion annually through economic development groups on incentive packages with hopes to lure business to the state. Critics claim these programs are really just a "red herring," there to funnel taxpayer funds to special-interests with little to no oversight.
For the last two years, Scott has paraded his Enterprise Florida recipe-for-success as if it were the end-all to the state's economic woes, but critics point out that EFI victories are few and far between.
The Enterprise Florida Inc. (EFI) partnerships, Scott speaks of -- everywhere he goes -- are partnerships; very skewed ones. According to an Integrity Florida/Americans for Prosperity Florida report, EFI's annual budget is $18.1 million, and corporations contribute less than 15 percent of that cost, while public funds pick up the balance.
For the fiscal 2014 budget, Scott wanted to expand the amount of funds available for partnerships to almost $300 million; but the legislature held investments into economic partnerships for FY 2014 down to $106.6 million.
Florida's Governor has managed to disregard the mounting number of Public/Private endeavors that have failed -- never meeting the job creation objectives -- and the Governor never mentions how much those investments have cost the public.
- Banah International Group, a sugar company that received a $430,000 incentive package to move operations to Miami Dade county, went bankrupt one year after their agreement. Officials later found Alexander Perez, Banah's chairman, had served four years in federal prison for cocaine trafficking.
- In Florida's panhandle, Redpine Healthcare Technologies shut down just months after receiving $750,000 in incentives. They were supposed to create 410 jobs, averaging $49,155 a year.
- Piper Aircraft in Vero Beach and MetLife in Tampa are still more examples of companies not making their job mark, yet keeping the money. Between 2007 and 2011, Enterprise Florida reported that the state gave out just shy of $200 million in up-front incentives.
In Sarasota, all you have to say is, "Sanborn Studios" to understand just how costly and hollow public/private partnerships can be.
Integrity Florida reviewed the Florida's Department of Economic Opportunity (DEO) portal on Aug. 26, and found only 10 companies with incentive agreements negotiated by Enterprise Florida since Gov. Scott took office, that have created confirmed jobs.
State Rep. Mike Fasano, R-New Port Richey was reported by the Tampa Bay Business Journal as saying, “These companies base their expansions on geography, on community, on education, transportation and infrastructure, not on tax giveaways," and a growing number of state lawmakers agree.
According to the Integrity Florida report, a total of 545 jobs from 10 companies based on the confirmed performance to date reported on the DEO incentives portal out of 251 projects with agreements signed on or after January 4, 2011, when Rick Scott was sworn in as governor of Florida.
Additionally in the Integrity Florida report, were a list of confirmed layoffs reported to DEO through WARN notices since Gov. Scott took office:
- 17,572 layoffs in 2011
- 17,823 layoffs in 2012
- 9,637 layoffs in 2013
Critics of EFI claim they are no more than a pay-to-play proposition. This perception is supported by EFI's request that corporate heads, who seek a seat on the Board of Directors, donate at least $50,000 a year to sit at the table.
Board members are not restricted from forming alliances, voting for each others partnership contracts, projects or investments; and often end up securing incentive grants for their own companies or ones they are closely connected to.
Unlike most state business arrangements, EFI contracts aren't subject to strict Sunshine Laws, conflict of interest rules or prevented from partaking in closed-door-agreements.
Accusations to "conflict of interest" are supported by the extraordinary bonuses given to EFI staff.
The Tampa Bay Times recently reported, Gray Swoope, CEO and President of Enterprise Florida, received a $70,000 bonus for his second year in a row, adding that the board also signed off on more than $630,000 in bonuses for other agency employees.
That looks a lot like pals rewarding pals based on who they picked for rewards -- only it's the public that picks up the tab.
Dan Krassner, executive director of the Integrity Florida group says, "The public should be concerned about a taxpayer-funded entity handing out huge bonuses without accountability for results."