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Tuesday, Sep 30, 2014
Politics

Businesses in Hillsborough’s poorest neighborhoods could get tax break

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TAMPA — Some of Hillsborough County’s most impoverished neighborhoods could get an economic kick-start thanks to action taken by the county commission Wednesday.

Commissioners voted unanimously to enlarge the county’s enterprise zone from 3.1 squre miles to 15.6 square miles. The vote extends the areas eligible for state tax credits for new or expanding businesses from the current zone around the University of South Florida to an area just west of King High School, and also impoverished areas in Palm River, Gibsonton and Riverview.

The new zones were chosen because they meet the state’s misery index: a poverty rate of more than 20 percent and over 30 percent in half of the designated area; unemployment at or above 8.9 percent; and general distress, such as high crime, abandoned buildings and deteriorated roads and drainage.

“It’s trying to speak to a part of our community in need,” said county Economic Development Director Ron Barton.

A city or county can have up to three non-contiguous areas in an enterprise zone as long as they don’t exceed 20 square miles. Until now, the county’s enterprise zone contained just the 3.1-square-mile area of shabby neighborhoods around USF.

The proposed boundaries enlarge the zone around the university northward. And they add a zone just west of King High School, bordered by 50th and 56th Streets on the east and west, Hillsborough Avenue in the south and almost to the Hillsborough River in the north. The third zone is a patchwork of destitute areas in the southern part of the county from Palm River south to Gibsonton.

When the state approves the new zones, businesses that locate there or expand will be eligible for the following tax credits:

• Job tax credit of 20 percent on wages paid to workers who live in the zone, or a 30 percent credit if 20 percent or more of the company’s employees live there.

• Building materials sales tax refund up to $5,000, up to $10,000 if 20 percent or more of the employees live in the zone.

• Business equipment sales tax refund, with the same conditions as the building materials credit.

• Property tax credit against the Florida corporate income tax. The credit will be equal to the property tax the new or expanding business pays to the county, up to $50,000 annually.

Barton said the tax breaks are aimed as much at retaining existing businesses in struggling areas as in attracting new companies.

“This is a toe-hold to keep businesses viable in distressed areas of our county,” he said. “It’s about business retention as much as it’s about business attraction.”

Commissioner Sandy Murman, who represents much of the southern part of the county, had asked Barton and the county’s enterprise zone committee to look at expanding the zone there.

“This is a no-brainer for me,” Murman said. “We meet all the benchmarks to expand these.”

Though he voted for the expansion, Commissioner Victor Crist expressed reservations after the meeting. Crist, a former legislator, sponsored the bill creating the enterprise zone in the University Area. He said the state has a finite capacity for tax credits.

Competition for the credits is fierce, Crist said, and the state judges which communities get credits renewed by the job-creation impact realized from past tax rebates.

Enlarging the zone will dilute the job-creation effects over a large area, Crist said.

“I think Hillsborough County has a greater argument that it’s been successful because its target area has been small,” he said.

The state reviews enterprise zone credits for renewal in 2015, Barton said.

msalinero@tampatrib.com

(813) 259-8303

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