By By Dan Krassner
Until 1996 Florida had a Department of Commerce managing economic development. Starting in '92 it began to be privatized, under former Gov. Lawton Chiles, into a public-private partnership called Enterprise Florida.
According to a 1992 profile of Enterprise Florida in Florida Trend magazine, the organization would enable select corporations to be part of "a new power elite in Florida business" that would enjoy "warm relations with the Chiles administration."
The Florida Trend article describes how the Chiles administration solicited confidential donations of as much as $150,000 from 10 select corporate donors for Enterprise Florida and how the entity was designed to "dilute the influence of Tallahassee's traditional business lobbyists–especially those who are hostile to the governor." From the start of Enterprise Florida there have been concerns about its built-in conflicts of interest, exemptions from Florida's sunshine laws and the public benefit of outsourcing the state's economic development policy.
Under Gov. Rick Scott, the state's economic development operations have been moving back into government with the reestablishment of a Secretary of Commerce, who also serves as head of Enterprise Florida, and a new Department of Economic Opportunity (DEO). Enterprise Florida remains in existence through a monopoly, no-bid contract with DEO.
According to the New York Times series "United States of Subsidies" from December 2012, Florida spends at least $3.98 billion per year on incentive programs. That is roughly $212 per Floridian and 16¢ per dollar of the state budget. But, in a stunning admission from Enterprise Florida's chief operating officer in front of a legislative committee in Tallahassee, the organization is unable to assure that the money coming from Florida taxpayers is being used to hire Floridians.
This year, Enterprise Florida is seeking an increase from $111 million to $278 million for economic development subsidies to give to a handful of companies who promise to keep or add Florida jobs. But shouldn't every Florida business matter? Should Florida lawmakers allow Enterprise Florida to continue to give away our money as subsidies to corporations that may not hire any of the 749,000 jobless Floridians?
Enterprise Florida will argue that they comply with all laws and regulations, and so will the companies benefiting from incentive deals. But the debate is not about compliance, it is about credibility. A challenge for Enterprise Florida staff is that their bonus pool comes from the private sector contributions of large corporations who often seek subsidies and vendor contracts from Enterprise Florida. The measures of success for the organization's staff rely on handing out government subsidies in the name of job creation even though the staff claims they often help employers add jobs without incentives. The legislature may want to consider if it is even appropriate for Enterprise Florida staff to receive bonuses for just meeting the requirements of the DEO contract.
Florida job creators and economic developers are not the problem. They are playing by the Enterprise Florida rules set by legislators in the 1990s, but that does not mean policies allowing so much government interference in the market are in the best interest of all Floridians. Most employers would likely prefer public policy that supports free enterprise rather than a state controlled economy planned by companies able to pay $50,000 for a seat on the Enterprise Florida board.
Integrity Florida partnered with Americans for Prosperity on a research report titled "Enterprise Florida: Economic Development or Corporate Welfare?" We documented Enterprise Florida's apparent conflicts of interest, the appearance of a pay-to-play scheme for winning favorable treatment and its repeated practice of picking winners and losers in the marketplace through target industries, potential favoritism, and selective incentive deals.
Floridians have entrusted Enterprise Florida with significant public resources to deliver high quality job creation results, yet the organization has failed to accomplish its goals. Our report found that Enterprise Florida has failed to deliver half of its original job creation goal and is not meeting its legislative requirement of fifty percent funding from the private sector. Presently, more than 85 percent of Enterprise Florida funding comes from taxpayers.
While some have criticized Integrity Florida for having a report sponsor who believes in free enterprise and opposes corporate welfare, Enterprise Florida has failed to point to any inaccuracies in our research following two separate reports, the first published in April 2012 with no sponsorship. We would like to see Enterprise Florida answer the questions raised in our reports. The taxpayers of Florida deserve better than the secrecy and lack of accountability exhibited by Enterprise Florida.