On the Mark: Funding private business with taxes

MARK STRAIN

If looking for something positive to come from the failed attempt by Jackson Labs to locate in Collier County, it would most certainly be the heightened awareness of both taxpayers and voters to local politics.

Not only was the effort to bring Jackson Labs here poorly managed, but the often harsh and condescending treatment of the public during the process revealed to many citizens the extent our local system is entrenched with special interest influence. Fortunately there are now more members of the public with an increased awareness of local politics. Any time more folks are involved, more questions will need to be answered and more of what was business as usual can become the focus of attention.

In spite of what our politicians wanted us to believe, according to a local poll a substantial majority of taxpayers were opposed to using our taxes for funding private business to the amount requested by Jackson Labs.

The opposition was not so much against Jackson Labs as a business, but simply the use of so much of our tax dollars without our consent, especially in these more difficult financial times, to fund a private business. The distinction over the amount of funding requested by Jackson Labs is an important issue in this effort. The amount they were seeking was at one time $130 million from our local tax base with a matching amount from the state.

What is interesting is that the idea of public funding of private business is really nothing new in Collier County. Previous values may be considered miniscule compared to what Jackson Labs was asking for, hence the higher profile, but we have in the past routinely funded all kinds of businesses with tax money and the public never seemed to notice or express much concern. There may have been advantages to keeping previous amounts small; it may have successfully kept a questionable program under the radar and out of higher public scrutiny.

There are about a half dozen incentive based programs that all use tax money to encourage private enterprises to do new or more business in Collier County. They are all based on some tie to job creation.

One program in particular that recently caught the attention of Collier County Commission candidate Tim Nance is the Property Tax Stimulus Program. This program is available to businesses based on what physical improvements and jobs they bring if they relocate, move or expand in Collier County. It has been used in the past at least a couple of times and basically indirectly reimburses businesses for their payments of property taxes.

To use this program, a business improves its property in line with its accepted application. The approval is based on criteria which includes job creation. After the property improvements are completed and after the property valuations are established by the tax assessor, the business owner is sent a property tax bill, which must be paid in full, not in installments, and on time. Once that bill is paid the business owner can then request a program approved incentive payment, which can be up to the amount of the tax bill and for 10 years, starting with the year the promised jobs are created.

There is a Florida statute that requires a referendum for “ad valorem tax exemptions.” Since Collier County does not exempt the property taxes and businesses must pay their property taxes first and then have the money reimbursed, our local government believes such a maneuver does not qualify as a tax “exemption” even though the outcome is basically the same.

Circumventing the law to achieve the same result the law is intended to protect certainly does not seem consistent with the intention of the law.

Voters should not have to weigh in on every application for this property tax benefit program, but they should be asked to approve the process, the extent it can be used and the monetary caps that would be allowed.

Currently a local business, Arthrex, has applied to enter this program based on their future plans to expand in one area and relocate in another. Because of the large number of jobs they would create, the value of the incentive programs could be quite large and this has renewed interest in programs that rely upon public funding. With Arthrex hoping to move quickly, there is a timing concern if we were to hold a referendum in 2012.

The timing for funding within the property tax incentive program comes well after the completion of an applying business’s improvements and after the creation of program specific jobs. For consideration of funding such a program, a referendum on this matter could be held in 2012 and thus would still be within a practical time frame before any funding would realistically occur.

The concern may not be as much about the timing as it is about convincing voters who have an increased awareness of local politics, that there is a need for these incentives. This should have been done right from the get go in 2003 when the ordinance was created instead of seeking ways to dodge the intention of the law. Arthrex is doing nothing more than making a good business deal within the parameters of the existing ordnance; it is the existing ordinance that is the problem, not Arthrex.

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