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Corporate welfare

Florida hands out millions in public money to private business to create jobs, but the value of what it gets in return is questionable.

A Times Editorial
Published April 17, 2005

A business that threw around millions of dollars as haphazardly as the state of Florida does for economic development would not be in business very long. A hodgepodge of tax breaks and special incentives has produced at best mixed results over the past decade, and no one in Tallahassee keeps close track of whether taxpayers are getting enough bang for their buck. If government is going to give away public money to private businesses, the least it can do is set better ground rules and hold itself more accountable.

A special report by St. Petersburg Times staff writers Sydney P. Freedberg and Connie Humburg concluded the state could pay more than $900-million in 2004-05 on economic development. Yet the state's average wages still trail the national average. Workers at some companies that have received the incentives, including Wal-Mart, are on Medicaid. And the state does not require independent confirmation of company claims for tax refunds or make public the wages and taxes paid by companies that receive incentives.

The true benefits of such tax breaks are questionable. It is hard to fathom that Wal-Mart or Home Depot would not bring more jobs to the fourth-largest state if they did not receive tax incentives. Florida's rate of job growth is more than twice the national rate because of population growth, not because of tax breaks and incentives. Even the value of jobs that are credited to some incentives is overstated. The companies receiving them report an overall average salary that can be inflated by a few high salaries for executives.

The Bush administration is particularly defensive about the state's economic development efforts. It argues that tax breaks for specific businesses should be distinguished from other tax incentives, even though the goals are the same. It contends the oversight of the economic development efforts is adequate, then hides behind public records exemptions and criticizes auditor general reports that found flaws with the monitoring. It defends millions in tax breaks for a computer-chip plant near Orlando that has lost jobs and is scheduled to close by the end of the year. Ask workers who lost their jobs whether that was a wise investment of their tax dollars.

The state cannot guarantee that companies receiving tax incentives won't downsize, merge or move jobs overseas. But many tax breaks were won through political influence, and they do not reflect a cohesive economic development strategy. Economic development incentives should be aimed at achieving specific goals, such as luring particular kinds of industries and aiming for higher-paying jobs. Companies that benefit should be required to disclose precisely what they receive and the salaries for the types of jobs they created, not meaningless average salaries.

The Bush administration has no problem holding public schools accountable for their performance. It should be at least as vigilant in measuring and disclosing the results of giving away the public's money to big business.

[Last modified April 17, 2005, 00:25:16]


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