With more than 1.1 million Floridians out of work, Florida lawmakers are searching for ways to stimulate hiring through a series of tax breaks to potential employers amounting to $705 million. But, a just released report by the Florida Center for Fiscal and Economic Policy (FCFEP), a Tallahassee-based think-tank, points out that the scale of the tax breaks will have little effect on the overall Florida economy and generate few jobs. Rather, such tax breaks merely divert resources from vital services such as public schools and health care.
The report notes that too that some $1.6 billion have been spent by state and local governments to encourage firms to locate in Florida in attempts to create a biotechnology cluster, but there is very little to show for it.
“The effort began in 2003 with the appropriate of $310 million in state funds to entice Scripps to create a Florida Research Institute to locate in Palm Beach County. Another $449 million in state funds have been awarded since then to seven other biotech research and development institutes in six counties–with little to show for it,” the report states.
A policy analysis undertaken by the government’s own “Office of Program Policy Analysis & Government Accountability” noted in January 2010 that this investment has not yielded the growth of technology and the seven program grantees as of September 2009, had created a total of 783 jobs or about $969,350 in state funds per permanent job.
The report also argues that research has long demonstrated that economic development subsidies or incentives are seldom the deciding factor in business location. Rather, an educated workforce, transportation and quality of life usually rank well above location incentives. Even Enterprise Florida, the state’s economic development agency, in its 2009 Incentives Report, stated that incentives placed seventh among site selection factors in a survey of major companies nationwide.
