Gov. Rick Scott is picking the fight of his administration over the state’s marketing agencies. He has a weaker case on Enterprise Florida than he does on Visit Florida.
Enterprise Florida’s mission is to recruit and retain businesses using subsidies and tax breaks. Scott, who portrays himself as having rescued Florida from the Great Recession, wants $85 million more for Enterprise Florida and praises the agency’s record.
Last month the state’s chief economist told a House committee the state is losing money on business incentives. Over the last three years, said Amy Baker, 18 of the state’s 26 economic development programs have returned less than a dollar for every dollar invested. That includes the Quick Action Closing Fund, which the governor, who doubles as chairman of Enterprise Florida, uses to finalize deals. Part of the $85 million he seeks would go to the fund.
The trend is down even with the more effective incentive programs. While the Qualified Target Industry program returned $4.40 for each dollar, that’s down by nearly one-third, even as Florida’s overall job growth has led the nation over the last three years.
In an interview with the Sun Sentinel Editorial Board, Enterprise Florida CEO Chris Hart acknowledged Baker’s numbers, but suggested a change in how the agency distributes money would show better returns. Hart will propose that as he lobbies legislators.
Hart also resisted comparisons between Enterprise Florida and statewide job gains. Enterprise Florida’s priority, he argued, is economic diversification — promoting industries outside of Florida’s tourism-agriculture-construction economic triad.
Enterprise Florida supporters cite examples such as Sancilio & Company, a specialty pharmaceutical firm in Riviera Beach. Last year, the company got $3.8 million to keep its 149 jobs in the city and add 275 by mid-2019.
Anecdotes, however, matter less than trends and accountability. Scott asked for that quarter-billion last year before an audit — which led to some reforms — concluded that Enterprise Florida had top-heavy management and questionable hirings. Enterprise Florida receives 90 percent of its money from the public, but too often has acted like a secretive public company.
So has Visit Florida. The agency hid its $1 million contract for the rapper Pitbull to promote Florida’s beaches. It also awarded a $9.1 million contract to a partnership that included a former Visit Florida executive. It also spent $11.6 million on a cooking show featuring Emeril Lagasse.
The Legislature, however, should not eviscerate Visit Florida. While the first version of HB 7005 would have eliminated it along with Enterprise Florida, a new version would retain Visit Florida, but reduce its budget from about $80 million this year to $25 million next year.
Such a move would hurt Florida. Sales tax revenue is the main source of state revenue, and Florida tourism has set records the last five years. The state’s top economist says tourism’s strong performance is making up for softness in the real estate market. Why mess with success?
Though individual companies have large advertising budgets — think Disney and Universal — tourism marketing helps businesses at all levels. And unlike Enterprise Florida, Visit Florida isn’t about giving money to a private company. It’s about telling the country and the world why Florida is a great place to play — and perhaps do business.
Visit Florida promotes an entire industry: theme parks, museums, hotels, bed and breakfasts, restaurants, tour operators and much more. While Florida has much to offer, so do states and countries that want to steal our tourists and our convention business.
The Greater Fort Lauderdale Convention and Visitors Bureau estimates that tourists spent $13 billion in Broward County last year and that tourism, the county’s leading industry, supports 95,000 jobs. Tourist taxes in Broward and Palm Beach Countyalso support marketing to attract visitors, but officials in both counties tout the benefits of promoting the state brand.
Tourism-related jobs also won’t leave the state. That’s not always the case with jobs bought by Enterprise Florida. Corcoran points to the Sanford Burnham medical research institute in Orlando. It received $350 million in 2006 after promising to create 303 jobs in 10 years. The institute couldn’t meet its goal. It intends to leave Florida and is refusing to repay nearly $80 million for breaching its contract.
We acknowledge that some cities, such as Boca Raton, especially benefit from Enterprise Florida money. But why, for example, should incentives be given to a company like Wawa to the potential detriment of local fast-food franchises?
As Baker noted in her presentation, direct investment — universities, schools, infrastructure — could make Florida more appealing to all businesses, not just those with the right connections who might start looking for the next handout as soon as they arrive.
Politics underlies this fight. Corcoran likely will run for governor as a budget-cutter. Scott likely will run for the U.S. Senate as a job creator. That leaves the Senate, as usual, to play the responsible adult.
We recommend the Senate give Enterprise Florida the same scrutiny a company seeking the agency’s money should receive, and then decide whether to mend it or end it. After last year’s reforms, we editorialized that Enterprise Florida had to show it deserved any state money. The agency must change or die.
We also recommend the Senate seek to reform Visit Florida and make it more transparent, but give it enough money to keep Florida competitive on tourism marketing.
Behind the outrage of the governor and the speaker are their respective agendas. If neither Scott nor Corcoran gets what he wants, Florida will get what the state needs.