Ax Economic Incentives? Whoa, Says Florida Chamber’s Mark Wilson
Orlando Sentinel, February 21, 2017
By Michael Joe Murphy
WATCH Sentinel Opinions Editor Paul Owens checks in with Florida Chamber of Commerce CEO Mark Wilson on hot business and economic issues in the upcoming Florida legislative session.
Less than a month before the Legislature convenes for its annual session, a House subcommittee has approved a bill that would eliminate Enterprise Florida and Visit Florida, along with several tax incentives for businesses. The bill pits House Speaker Richard Corcoran, no fan of tax incentives, against Gov. Rick Scott, a champion of both agencies and of tax breaks to lure businesses here. With opposing sides hunkered down, all eyes are on the Florida Chamber of Commerce, the state’s leading business organization. To gauge chamber sentiments, the Orlando Sentinel Editorial Board interviewed Mark Wilson, chamber president and CEO.
Q: Where does the chamber stand in the battle over taxpayer incentives for businesses that create jobs?
A: Everything we’re doing is a about job creation, and everything we’re doing is about making Florida more competitive. It’s interesting that, in Washington, the fight’s between Republicans and Democrats, but here in Florida it’s increasingly between Republicans and Republicans. Where we come down on the issue of job creation and economic opportunity is that Florida should keep every tool on the table … that protects taxpayers, including taxpayer incentives.
I want to be clear about this: Incentives are almost always inappropriate, and they should rarely ever be used. In fact, they are rarely ever used. Only about 2 percent of the time do incentives come into play. Most jobs are created because small and mid-sized businesses say Florida is a good market … to create a job. But to send a message to the world that Florida is closed for business and that we don’t want to create jobs here anymore… We have a – [let’s] call it a philosophical difference if you want: We think the best way to protect taxpayers is, in fact, to have a system in place that creates jobs that generates more tax revenue so that we can fund teachers, firefighters and police [officers]. Now is not the time to send the message … that … we don’t want to create jobs anymore.
Q: Few chamber members receive a taxpayer incentive for creating jobs. So isn’t there an issue of fairness when certain employers get incentives?
A: We hear this a lot … [people ask], “Is it fair?” Some people … talk about picking winners and losers. What we do in Florida is very different than what’s [done] in other states. Remember, I was here 20 years ago talking about how … to diversify our economy in Florida. We have an agriculture-tourism based economy, and that’s always … important, but we also need modeling and simulation, and aerospace and advance manufacturing, life sciences and so forth. So what we say to the world is: “We want to accelerate the diversification of high-paying jobs and economic opportunity.” For everyone in the world … in those targeted industries, “If you come to Florida, and if you create jobs, it doesn’t matter what company you are. Anyone can have access.” So … we’re talking about diversifying … and creating more jobs and economic opportunity. And that’s an opportunity for every single Floridian – it’s also an opportunity for every … person … in [an] industry … to create job[s].
Florida doesn’t pick this company or that company – the companies … pick Florida. And remember, this is a competitive environment – [these companies] could pick Georgia; they could pick Brazil; they could pick Mexico; they could pick California. This is an incredibly competitive environment when you’re talking about high-wage, high-skilled jobs. That’s the part of the discussion I think some people are missing.
Q: Eliminating Enterprise Florida and Visit Florida could save taxpayers $100 million. How does the chamber view these proposals?
A: … All proposals deserve a fair hearing. … What we want to look at is, “What happens when you do these proposals?” Take tourism, as an example: Here we are in Florida, arguably the tourism capital of the world. [There is no] … personal income tax in Florida because of our tourism economy. We have over 100 million people visit our state every year, and in many ways it’s because we are marketing to them. We’re talking to them about why Florida is a good place. … . And some of them actually end up moving here, which helps drive our economy.
If we [were] eliminate Visit Florida, this … [would be equivalent to] a $90 million tax increase in Florida. If we … eliminate Enterprise Florida [and] Visit Florida – it [would amount to] an immediate $90 million increase, not to mention the over $11 billion of tax revenue that’s generated in Florida from the tourism industry alone. So, to suggest that … with all the taxpayer protections that are in [incentives], if we stop them [that] is somehow a way to save money, we are actually going to have to look at these like personal income taxes.
If we pull back from marketing Florida as a place for people to visit, if we send a message to the world that we’re not open for business anymore – where do you think [our] taxes [will] come from? … [Taxes] come from creating jobs; they come from people buying things. And if we don’t have people coming to Florida to rent hotels, to rent cars, to buy things from small businesses … that revenue engine [would] stop. … These programs not only pay for themselves, they provide an even bigger return back to the taxpayer, so we can have more dollars for roads like we’re [building] right now in Orlando — more dollars for teachers. … It’s a false narrative that … [to cut] … targeted incentives [that have] … taxpayer protections, [Florida would achieve] a … savings. It actually [would be] a huge cost. We could be looking at income taxes, and we could be looking at an immediate $90 million tax increase. …
Q: Senate President Joe Negron has a couple of proposals: Partner with the federal government on a $2.4 billion reservoir south of Lake Okeechobee to handle polluted runoff … and invest an additional $1 billion dollars … in higher education. Does the Chamber have any feelings on these?
A: … Both of those proposals are worth talking about. Like I said earlier, we should discuss everything because beneath all of these proposals [we] get us to better policies.
…[Regarding] education policy: We know from the Florida Chamber Foundation and research that talent is quickly replacing the tax incentive as the most important tool in the economic tool kit. We have 500,000 people in Florida … without a job, and we have 250,000 jobs without people. So investing more in the education to build that talent pipeline – … President Negron is on exactly the right track of investing more in higher education where the benefit is a trained work force; it benefits [research and development]. The science tells us, the economics tell us [that] this is exactly what we should be doing.
Now, on the flip side of this … Some people are suggesting building a second Lake Okeechobee south of the current lake. … I have personally traveled to Martin County; I have personally traveled to Stuart and … seen the blue-green algae. … It is a major problem. … But where the Florida Chamber always comes down on these issues is: We step back, and we say “Let’s take the politics out of it for a minute – what’s the right thing to do? What did the scientists say needs to be done?”
The science on what to do about the water challenges that are in Florida are very clear. We need to clean up the septic [tanks] north of the lake; we need to finish all the projects that the federal government has approved. I think Governor [Rick] Scott is exactly right: We need to do a cost-sharing program where the government pays for part of this, and we ask the individual homeowners and business to pay part of the conversion to septic tanks. So in terms of building a second Lake Okeechobee, it’s not that 10 years from now, 20 years from now, it’s not on the list of things that should be on the table. … [Science] tells us it’s not the first thing, second thing or third thing that we should [do] … to actually solve the problem. And so, I don’t think it’s as easy as [asking] … “Are you against it or are you for it?” I think the right conversation to be had is, “What’s the first thing you would do if you actually wanted to deal with the problem?” “what’s the second thing” “what’s the third thing”?” …[There] are a lot of things we could do with a couple of billion dollars right now, and to actually solve the blue-green algae problem in the first place. And converting septic tanks north of the lake is the A-number-1 issue that everybody agrees on. So it’s a matter of when you do it. And we don’t think doing it first is what the science tells us to do.