The Digital Domain film studio debacle needs to stay fresh in the minds of every legislator and taxpayer in Florida for years to come.
Built with $20 million in upfront money from the state, Digital Domain promised hundreds of high-tech jobs in a glamorous industry.
Instead, it became the poster child for unbridled corporate welfare in Florida.
The company went bankrupt three years after getting the money, leaving the state and local governments in St. Lucie County in the lurch. A review found the money was hastily awarded after some maneuvering by a few state lawmakers.
It might seem that nothing good could from that experience. But a bill signed by Gov. Rick Scott provides some measure of hope that the governor and lawmakers now understand the need for accountability when companies are given tax breaks or upfront money as an incentive to expand or locate in Florida.
The new law will subject the stateís economic incentive programs to a review every three years by government research and accountability agencies. The agencies will attempt to make certain the companies that receive state money are living up to their promises of jobs and revenue.
An attempt to make companies post a surety bond before being awarded state money failed to gain passage. We understand the motive for wanting that requirement but are sympathetic to the argument that it might put Florida at a competitive disadvantage when vying for companies looking to relocate. If abuses continue, however, the surety bond idea should be revisited.
Itís too bad it had to come to this. Over the past decade, the state has awarded billions of dollars in financial incentives and tax breaks to companies that promised to deliver much-needed jobs. With even a modicum of due diligence and some upfront accountability measures, the state might have saved some of that money and avoided having so much egg on its face.
When done properly, economic incentives are a legitimate way of attracting business. Companies that perform as promised create jobs and contribute to the tax base. When that happens, the return on investment is well worth the cost.
Too often, that return has failed to materialize in Florida. We hope this law goes a long way toward preventing another Digital Domain.