You don’t often see two conservative Republicans in a sloppy cage fight, but Gov. Rick Scott and House Speaker Richard Corcoran are swinging at each other even before the Legislature convenes in Tallahassee.
The big issue is Enterprise Florida, the agency tasked with luring new companies to the state. Traditionally, this is accomplished by wildly throwing buckets of money, most which comes from public funds.
Corcoran calls it “corporate welfare.” Scott says it’s a swell program that is essential to bringing new jobs, and he is asking lawmakers for $85 million.
The governor wanted the same thing last year and got roasted. His new strategy is staging doomsday press conferences in the home districts of GOP legislators who oppose Enterprise Florida.
Corcoran is fighting back with a slick video highlighting — actually, lowlighting — some of the infamous corporate backfires that have cost taxpayers dearly.
The video opens with the inglorious story of Sanford Burnham Prebys. In 2006, the California-based medical institute received about $360 million in state and local incentives to open a research facility in Lake Nona, near Orlando.
In exchange, the firm promised to provide 330 high-paying jobs within a decade. It came up 64 jobs short.
Last year Sanford Burnham tried unsuccessfully to have the University of Florida take over its Lake Nona operation. Now Scott’s administration is trying to retrieve almost $78 million in incentive funds.
Good luck with that.
Then there’s the case of Digital Domain, a painful digital experience for both employees and taxpayers. The cinematic special-effects company opened a studio in Port St. Lucie in early 2012, a deal sealed with massive local and state giveaways.
Nine short months later, Digital shut its doors and then went into bankruptcy. About 300 local jobs were lost.
A court settlement awarded the state a pitiful $3 million of its $20 million investment, while the town of Port St. Lucie got back only $3.2 million of almost $52 million in incentives.
The ex-CEO of Digital fared much better. The court gave him $8.5 million to pay down a mortgage on a big house in Colorado that he’d put up as collateral for a loan to the company.
The Digital deal was hatched under Gov. Charlie Crist, and Scott says his version of Enterprise Florida is more careful about dispensing our money. Most incentive agreements now require companies to meet performance levels before receiving any public funds.
Corcoran and other Republicans seeking to gut Enterprise Florida have found support from Americans For Prosperity, the Tea Party group funded by the ultraconservative Koch brothers.
It’s not only the concept of corporate handouts that offends opponents of Enterprise Florida. It’s the idea of giving select large companies a competitive advantage over others.
Another factor is Enterprise Florida’s overhead. Until last spring, it had 90 employees, offices abroad and a payroll of $9 million. It was forced to shrink dramatically after the House rejected Scott’s request for $250 million in “recruitment” funds.
Many states offer money and tax breaks to woo out-of-state companies. Proving those expenditures really pay off is difficult.
According to the Orlando Sentinel, Florida’s Department of Economic Opportunity tracked eight research companies that got $444 million in state incentives between 2006 and 2008.
Only one of those firms has met or surpassed its promised number of new jobs. That’s a lousy (and very expensive) batting average.
Corcoran and other critics of Enterprise Florida say the money being spent on corporate giveaways would be better invested in schools, roads, and other public projects. Scott has intimated that Corcoran is posturing because he plans to run for governor.
It’s an amusing complaint, because Scott himself is running for the U.S. Senate in 2018. His campaign identity has been styled entirely around job creation, and he’ll claim credit for every new WaWa and Taco Bell that has opened in Florida during the nationwide economic recovery.
Which is what politicians do.
What they don’t do, usually, is tangle openly with powerful members of their own party.
Scott says the resistance to Enterprise Florida is an attack on business, while Corcoran says it’s an attack on government waste. At stake is at least $85 million of state money, which most Floridians would rather not gamble on another Digital Domain.
That’s what makes the fight between the governor and the House speaker worth watching. It’s a political power play about something that actually matters.
IMAGE: Florida Gov. Rick Scott addresses an economic summit in Orlando, Florida, June 2, 2015. REUTERS/Steve Nesius