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Rick Scott: High incentives paid low number of jobs created

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The campaign slogan during the 2010 gubernatorial race of 700,000 new jobs (in addition to any job growth based on national trends) in seven years was straight-forward and simple. The slogan or promise was compelling to many voters.

We are now into the third year of Governor Rick Scott’s tenure and a review of how well the promise of 700,000 new jobs in seven years is progressing is not so promising. Reporters from the Miami Herald examined the proposed jobs where the state offered economic incentives to lure companies and projects to the state. Some examples of the proposed projects are:

• Colt Manufacturing Company. Two years after providing $250,000 in incentives to renovate a warehouse in Kissimmee, the building is empty. Total jobs promised – 63; total jobs created – 0.

• Global Voter Solutions. Eighteen months after providing $700,000 in incentives for a civic website, the project is dormant and the owner of the company declared bankruptcy, stating he could not find investors. Total jobs promised – 127; total jobs created – 0.

• Redpine Healthcare Technologies. Two years after providing $400,000 in incentives to move some of their operations from Spokane, Washington to Panama City, the company owner declared bankruptcy. Total jobs promised – 410; total jobs created – 0.

In total, the state has pledged $266 million in incentives in return for 54,258 new jobs; however, 96 percent of those jobs have yet to be realized. In Broward and Miami-Dade counties, $25.2 million in incentives has been pledged with a current return of 61 jobs created.

There are some successes. Hertz car rental is transferring approximately 700 employees from Park Ridge, N.J. to a new location near Fort Myers. The incentive package for the move is approximately $19 million. Mindtree, a web design firm for airlines, hotels and other large companies, is creating 400 jobs to be located in Gainesville. The incentive package pledged is $2.1 million with $950,000 of that already paid; although no jobs have actually been created yet.

For all of the incentive induced projects, it appears the dollar amount of the incentives promised, and actually paid, is extensive and overreaching, in comparison to the number of jobs promised and actually created.

Since Gov. Scott has taken office the unemployment rate in Florida has gone from 11.1 percent to 6.7 percent, and the state has added 440,000 private-sector jobs, according to federal data. Those are numbers moving in the right direction. Amy Baker, Florida legislature’s chief economists, has said the drop in unemployment is partially due to people who stopped looking for work. In addition, the jobs gain mirrors, in part, the national trend.

The two questions to ponder, (1) is the dollar amount in incentives compared to the promised and created jobs, worth the cost to the state, and (2) is the decrease in the unemployment rate and the added private-sector jobs in Florida due to Gov. Scott, the national trend, both, or neither?

To receive email alerts when new articles authored by Armand Colson are available, click the “Subscribe Button”. Contact at armandcolson@gmail.com

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