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Monday, Jul 28, 2014
Editorials

Keeping watch on economic development

Published:

Gov. Rick Scott and Florida lawmakers who are quick to shovel money to economic development should review a study that found the public-private partnerships states often use to pursue new business frequently result in waste, conflicts, extravagant salaries and lack of oversight.

Florida was among the eight states outsourcing economic development functions that were reviewed in the study by Good Jobs First, a nonprofit research center.

The organization is clearly liberal and supportive of unions and public employees. We don’t buy the group’s conclusion that public agencies — “fully covered by ethics and conflicts laws, open records acts, and oversight by auditors and legislators” — should handle economic development.

But there is no disputing the troubling record of many of the public-private economic development efforts and the need for more oversight of such partnerships.

The report found Enterprise Florida, the semi-private agency responsible for recruiting companies to the Sunshine State, has fallen far short of its job-creation promises.

Two years ago, a state report found about one-third of the 729 subsidy contracts that Florida had signed with businesses over 10 years did not bring the promised results.

The Tribune’s Mike Sasso earlier this year discovered Enterprise Florida’s 2012 Annual Incentives Report omitted failing ventures in a program that offers upfront funding to relocating companies.

Sasso found 13 companies that participated in the Quick Action Closing Fund failed to generate the required jobs, and were left out of the official tabulation. He also found two companies that were listed as hitting their goals actually were 1,300 jobs behind schedule.

Yet Enterprise Florida listed the state’s economic incentive efforts as 600 jobs ahead of schedule.

The Good Jobs First study also recounts how Enterprise Florida badly misses its private fundraising targets. Though obligated to obtain 50 percent of its revenue from private sources, in the fiscal year that ended in June more than 80 percent of the agency and its associated operations’ revenue came from state funds.

Independent government watchdog Integrity Florida pointed out earlier this year that just more than 2 percent of Enterprise Florida’s revenue came from private investment contributions.

Another detail:

Enterprise Florida Executive Director Gray Swoope was given a $70,000 bonus — atop his $230,000 annual salary — for “promised” jobs that had not yet been created.

Florida is hardly the only state with questionable economic development practices.

A state audit found more than 40 percent of the jobs promised by the Indiana Economic Development Corporation never materialized.

Jobs Ohio obtained more than $5 million public dollars without its Legislature’s knowledge, widely intermingled public and private funds, and refused to name its private donors, though they may stand to benefit from the agency’s subsidies.

There is no question Florida and other states need to invest in economic development, and providing financial incentives to attract companies is often necessary in today’s highly competitive climate.

But the report indicates entrusting such decisions to quasi-private operations without ensuring rigorous oversight and accountability is inviting waste, if not scandal.

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