Paying companies to relocate to Florida is paying off, according to Enterprise Florida, the organization tasked with attracting job creators to the state. Enterprise Florida CEO Gray Swoope presented the group’s annual report to the Senate Commerce and Tourism Committee on Tuesday.
Economic incentives to attract businesses to Florida take many forms, including tax breaks, rebates and grants. Committee Chair Nancy Detert (R-Venice), said, the return on investment from incentives has been a hot topic, and somewhat of a mystery to lawmakers, for many years.
“We have asked for a report on who’s getting these incentives, what the state gets in return,” Detert said. “We often hear all the criticism of the companies that failed. So maybe you have some successes to share with us.”
Swoope reported, since he took over three years ago, the return on investment on state grants for businesses has improved every year: “More jobs, better wage, better return, less taxpayer money put out. And with the average investment of $3,200 a job, it is a positive story,” he said.
That means for every job the companies create, the state has invested about $3,200 in grants. And, Swoope said, since 1995, incentives have gone to give more than 100,000 Floridians jobs that could have gone to North Carolina or California or Texas.
“There is a war for jobs today and we have to compete. I like to ask people when they ask me about incentives, I say, ‘When’s the last time you paid full price for a car? If you did, then I know a lot of people that want to be selling you a car.’ For the most part, people negotiate; they ask for incentives,” he said.
And once companies come to Florida, Swoope said, Enterprise Florida makes sure to hold them accountable for creating the jobs they said they would. All projects now go through a vetting process with the state Department of Economic Opportunity.
And three-quarters of contracts have conditions that companies must meet or the money gets taken back. Over the past two years, Enterprise Florida has taken back more than $14 million from businesses who received just one type of grant, he said.
But then there are the high-profile failures. Swoope was asked to explain what went wrong with Digital Domain, a bankrupt movie production company the state had invested $20 million in and is still trying to figure out how to get its money back from.
“Digital Domain circumvented the process when EFI said this was not a project that was recommended for funding, but it was funded anyway,” he said.
Gov. Scott is awaiting a report from the Inspector General about how that was allowed to happen.
But Swoope said, out of about 100 projects that got the same type of grant as Digital Domain since did 1995, only three have failed. The other two were chiropractic software company Redpine in Bay County and DayJet .
And, he said, over the past two years, there’s been a 40 percent increase in competitive projects Florida has won.