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South Florida Business Journal: Florida Legislature approves budget with big cut to Enterprise Florida; most incentive programs to remain
Tuesday, May 09, 2017
he Florida Legislature approved a budget May 9 that would significantly reduce funding for Enterprise Florida, although the economic development agency’s job incentive programs would continue.
The question is whether Governor Rick Scott, a major proponent of Enterprise Florida, will sign the budget or veto it. Earlier this session, the Florida House approved a bill to eliminate Enterprise Florida and many of its jobs incentive programs, but the Senate did not pass a similar measure.
The Legislature approved $16 million in funding for Enterprise Florida in the 2017-2018 budget year. That is down from $23.5 million in funding for the current budget year. The biggest reduction would be in its marketing programs to make companies aware of Florida’s business climate. Enterprise Florida would maintain its funding for operations, international offices and foreign trade missions, agency spokesman Nathan Edwards said.
Enterprise Florida still has the ability to raise funds from donors.
Governor Scott requested $200 million for the Quick Action Closing Fund to award up-front incentives for major corporate relocations and expansions. For the second year in a row, the Legislature did not fund this program.
However, Enterprise Florida can still award new incentives through programs that provide tax rebates over time, such as the Qualified Target Industries (QTI) program. These usually come with a 20 percent match from local governments.
Kelly Smallridge, president of the Business Development Board of Palm Beach County, confirmed that the state budget did not eliminate QTI, which is the most common incentives program used to assist companies.
Smallridge and other local economic development officials previously warnedthat the discussions in the Legislature about eliminating Enterprise Florida were causing some companies that were considering job creation in Florida to look elsewhere. Florida can still offer incentives with the QTI, but other states with programs similar to the Quick Action Closing Fund could field more lucrative offers to major companies.
In the 2015-2016 fiscal year, the state executed 28 job growth incentive deals in South Florida with 4,347 pledged jobs, $731.8 million in expected capital investment and up to $20.3 million in state incentives, according to Enterprise Florida. See this database of local companies that received these deals.
Enterprise Florida is currently looking for a new leader following the resignation of Chris Hart in March after he cited a “critical” difference of opinion with Scott.
The Florida Legislature also approved cuts to Visit Florida, which would have its funding reduced to $25 million from $75 million in 2016. Scott asked the legislature for $100 million for Visit Florida funding, citing the state’s 1.4 million tourism jobs and significant tax benefits supported by billions of dollars in traveler spending each year.
Said Gil Langley, chairman of the Florida Association of Destination Marketing Organizations: “I am extremely disappointed in the outcome of the 2017 Legislative Session. A $25 million budget for tourism marketing, coupled with a wealth of bureaucratic red tape, hinders Visit Florida’s ability to do its job. With only $25 million dedicated to promoting our state, there’s no way Florida can stay on the same playing field as states like California. Not to mention, Visit Florida’s efforts are what keeps tourists from flying over Florida to Mexico, the Bahamas and now Cuba.”
South Florida Business Journal Digital Producer Emon Reiser contributed to this story.