Let legislators know that we need our development agency
Written by Michael Lewis on March 14, 2017
A battle between our Republican governor and his own party’s delegation in Florida’s House is likely to wreak unconscionable havoc in the economy by narrowing the stream of investment into the state.
The Republican-controlled House voted overwhelmingly Friday to abolish Enterprise Florida, the state’s equivalent of a commerce department, in a battle with Gov. Rick Scott, who has been championing economic development.
The state’s Senate has no similar legislation on tap, and unless both the House and Senate pass identical bills they cannot become law. Even if they did both pass the same bill, the governor could veto it.
But the threat to development is really that the sentiment of the House will color the upcoming budget, meaning the House would budget absolutely nothing for our official development agency. The budget battle could be huge, and economic development seems likely to be a major loser.
You have to wonder how every Republican representative from Miami-Dade could vote to end economic development. It certainly couldn’t be on the basis of helping Floridians. It can only be a pure political power play, with the citizens on the losing end.
House Republicans claim that Enterprise Florida merely picks economic winners and losers by giving incentives when a company adds or brings in jobs.
Incentives foes cite firms that didn’t meet their promises to Enterprise Florida. But a company that doesn’t create promised jobs seldom is paid for doing so, because most incentives are paid only after the jobs exist. Failures seldom cost the state anything.
On Friday, Rep. Paul Renner of Flagler County said the incentive programs are “fundamentally unfair” because government is interfering in the marketplace, favoring some businesses over others. What he didn’t note is that government often favors some over others. The only way to stop government favoritism is to shut down government.
For example, a new highway favors businesses along the highway that will get customer traffic over businesses left off the highway route that will lose customer traffic.
Another example: whenever government goes out for bids on projects or makes purchases, it favors those who are chosen over others who aren’t.
When local government sets or expands curfews on bars, clubs and restaurants, it favors or penalizes some businesses at the expense of others that aren’t affected.
Special taxes and license fees favor businesses that don’t have to pay at the expense of businesses covered by the legislation. Change a few terms and the groups favored or penalized might reverse positions.
Examples abound. One reason lobbyists fill the halls of government is to get clients into favored groups or out of penalized groups by tweaking legislation or bidding terms.
Legislation will always yield winners and losers. The concern should not be that everyone can’t win, but that the ground rules that create winners are purposeful and fair.
In economic incentives, the purpose is clear: create jobs and investments in carefully targeted areas to benefit the state in the long run. Fairness rests on whether other businesses similarly situated and providing similar benefits would get the same opportunity to gain benefits by fulfilling promises.
That shouldn’t be a problem, because the more companies we have fulfilling job-creating goals, the healthier our economy gets – and the more the state collects in taxes that funded the incentives. The legislature’s own studies show that incentives reward the state with far more tax income than it pays out.
But in the argument over incentives, lawmakers glossed over the fact that Enterprise Florida does far more than incentivize growth. The agency markets the state around the globe and the nation, helping all Florida businesses that want to participate sell goods and services in other markets – again, pouring more tax money into the state to pay for roads, education and other needs without tapping the taxpayers.
The sad thing is that our lawmakers certainly know better. They have to know that most businesses and jobs that Enterprise Florida brings into the state come for no incentives at all. Simply publicizing Florida’s income-tax-free environment and other business-friendly advantages have brought uncounted economic gains to Florida.
But in a single vote Friday, the state House undercut much of that business-friendly image. What state friendly to business wants to shut its commerce and economic development agency? What state says that rather than get $3 to $5 in government revenue for every dollar it expends on economic growth it will gladly forego both the revenue and the jobs?
That’s a closed-for-business stance. The fact that the bill is unlikely to become law doesn’t make it any better for our image among future investors. Those investors will realize that one way or another, we’re choking to death future jobs and development. Is that a state where you want to hang your business hat?
Every Miami-Dade business should let its representative and senator know that its political and campaign support will go only to those who believe in economic gain – and who prove that belief when they vote.