Jobbuilding Rebate Wins Reprieve
Written by Risa Polansky on May 6, 2010
By Risa Polansky
Miami-Dade for the next decade can continue dangling a tax rebate to help lure new companies here after Florida legislators last week voted to extend a key economic development incentive.
Gov. Charlie Crist must sign the bill to officially extend until 2020 the Qualified Target Industry tax refund program, which was set to sunset in June.
But local economic development professionals are already celebrating.
"It’s significant for us because it is clearly one of the most widely used state incentives in our toolbox" for attracting new companies and encouraging existing businesses to stay and expand here, said Frank Nero, president and CEO of The Beacon Council, the county’s economic development arm.
The QTI incentive, as it’s known, is "designed to encourage the creation of high-skill jobs and encourage the growth of corporate headquarters and other targeted industries," the governor’s website says, by offering a $3,000 tax refund per new job created through relocating or expanding in Florida, plus bonuses for higher-wage jobs.
Businesses in Enterprise Zones get double, and minimum salary requirements can be waived in those cases.
The state covers 80% of the incentive and the local government the rest.
The companies must fulfill job creation promises to get the rebate.
"It’s probably the single most widely used incentive that the Beacon Council utilizes," Mr. Nero said.
Between fiscal 2007 and now, eight companies have been approved for the Qualified Target Industry incentive to relocate or expand here, promising a cumulative $38.4 million in new capital investment and a total 946 jobs.
This fiscal year alone, Visa Inc. agreed to add 366 new jobs here and US Gas & Electric 125.
As far as pending projects, Miami-Dade commissioners in recent weeks have agreed to incentives hoping to lure a proposed 2.5-million-square-foot Merchandise Mart-style trade center and warehouse/office complex for Asian companies.
Should the joint venture planning the project choose Miami, it’s promising 150-plus jobs.
And a Hispanic electronic media production company already in Miami is looking to expand and add 40 high-paying jobs, potentially here.
Commissioners approved offering a Qualified Target Industry incentive Tuesday.
"It’s one of our most visible economic development tools" for attracting and retaining businesses, acknowledged Robert Cruz, the county’s chief economist. "It’s significant that it was extended. That’s good news."
There’s no doubt the tool is often used here, Dr. Cruz said. But it’s hard to measure its significance.
"There are many different factors that are important in the decision where to locate a particular business, and it’s virtually impossible to qualify the significance of any one factor," he said.
A strong economy and thriving business climate are paramount.
"The real fundamental strength of the region is what’s important," Dr. Cruz said. "The incentives sort of are an additional tool, but without the fundamentals no incentive would really be enough to generate the economic development that we have seen in Miami-Dade County."
He acknowledged, though, that "other locations do provide incentives, so it’s important for us to have those tools, as well."
Continuing the targeted industry incentive wasn’t a sure thing during the state legislative session that ended Friday.
Two proposed but now-dead amendments could have cut Miami-Dade out of the game, the Beacon Council’s Mr. Nero said.
One would have eliminated the use of ad valorem taxes for the tax refund incentive — meaning here, where many companies are small and pay little in corporate taxes, the incentive wouldn’t have been much of an incentive at all.
The other change would have required using the local average salary as a benchmark for new jobs rather than the state average, which would have hurt urban areas like Miami-Dade, Jacksonville and Orlando, Mr. Nero said.
But heavy advocacy by local officials and others across the state helped keep the potentially detrimental changes out, he said.
And the newly reauthorized incentive "sends a clear signal that we’re open for business."