Scott’s job czar to lawmakers: Don’t judge us by adding up jobs
Although Gov. Rick Scott told voters during his campaign to hold him accountable for whether he hits his goal of creating 700,000 jobs in seven years, his top economic development director is telling lawmakers they shouldn't use the same logic to evaluate Florida's tax-incentives for businesses.
Gray Swoope, head of Enterprise Florida and Scott's newly named Commerce Secretary, told Senate budget-writers Tuesday morning that evaluating the state's dozen different financial-incentives can't be judged on whether the total number of jobs created over the last 15 years doesn't add up to what was promised when the deals were announced over the years.
"The math simply didn't work," Swoope told the Senate Transportation, Tourism and Economic Development Appropriations Committee.
Swoope and his team are on the defensive because the agency is asking for $230-million in business incentives next year - up from this year's $93 million - even though the governor's new Department of Economic Opportunity is having trouble reconciling the tracking systems for the millions of dollars the state has paid out to businesses that haven't met their job-creation targets in recent years.
Six weeks ago, new DEO director Doug Darling said "millions of dollars" had been paid out to companies that hadn't fulfilled their contracts. The agency then released figures showing that the state paid out $738 million over the past 16 years as part of more than 1,600 job-creation deals signed with companies.
The deals were cumulatively projected to generate more than 224,000 new jobs in exchange for $1.7 billion in tax credits, rebates and other incentives. About 40 percent of them never resulted in a single job, and the companies were paid nothing. Many other deals were only partially successful. In all, agency officials can confirm that only about one-third of the promised jobs were actually created, though many of the contracts are still considered "active" and may add to those numbers.
The agency also provided inaccurate data that suggested some companies had received $23 million in tax dollars and not met their job-creation targets, when in fact most of that money was sitting in escrow accounts and had not been paid to the companies.
"There was a lot of room for improvement," Swoope told lawmakers. "We've looked at a lot of things... We've learned that our system and the way we account for things is outdated."
Sen. Jack Latvala, R-Clearwater, took exception at the meeting with the disclosure of one of the companies - St. Petersburg-based Jabil Circuit - which state data originally said had been paid $12.4 million in state closing fund dollars for a new headquarters it hadn't built. The agency has since admitted it erred in releasing the inaccurate information, although Latvala blamed the Orlando Sentinel for the confusion.
"As we move forward, we're cleaning these programs up so we'll have better accountability and better tracking," Swoope said.
Several lawmakers on the panel - including Senate President-Designate Don Gaetz, R-Niceville - asked Swoope to develop a Web site that would break down how many companies had been paid, and how many jobs they had created.
Gaetz helped drive through the job-agency reform last spring and included requirements for the new jobs agency to do a more complete analysis on the return-on-investment for the last three years that is due next month.
Swoope said he'd rather wait until that December report is completed before committing to building a new Web site.
But Gaetz also took exception with the preliminary look at the performance over the last three years. Senate staff used the data DEO released to suggest that the state had entered into contracts to create some 40,000 jobs when only about 6,000 had been delivered. Although money wasn't paid to many of those companies, the cash committed to them often sits in an escrow account for years.
"We're tying up an extraordinary amount of cash," Gaetz said. "Shouldn't there be from time to time a re-look at deals that haven't matured at all, where nothing has happened, or where very little has happened?"
Swoope defended the tie-up of cash because "a lot of those are still open contracts," and "we have made a conscious decision" to sign contracts with them.