Enterprise Zones. The Florida Legislature s Office of Program Policy Analysis and Government Accountability. Kathy McGuire Deputy Coordinator

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1 Enterprise Zones The Florida Legislature s Office of Program Policy Analysis and Government Accountability Kathy McGuire Deputy Coordinator Florida Legislature Office of Program Policy Analysis & Government Accountability

2 State Financial Incentives Jobs Tax Credits: Sales and Use Tax, Corporate Income Tax Property Credit on Corporate Income Tax Sales Tax refund for building materials and business machinery and equipment used in the zone Sales Tax Exemption for electricity Also local breaks on fees and taxes Florida Legislature Office of Program Policy Analysis & Government Accountability 2

3 Other State Programs Are Similar 75% of states have EZ programs 3 states designated the entire state an enterprise zone! Most require zones to have high levels of poverty & unemployment and businesses to create jobs or invest capital Research shows mixed results Florida Legislature Office of Program Policy Analysis & Government Accountability 3

4 Are Application, Review, Approval Processes Effective and Efficient? Methodology: interview state and local program staff and businesses Found different procedures for refunds and credits, frustrating businesses; data reporting problems cloud results Recommended standard, written procedures; better communication and data processes Florida Legislature Office of Program Policy Analysis & Government Accountability 4

5 Are EZ Meeting Legislative Intent? Methods: Surveys of all Zone Coordinators In depth analysis of 5 zones Unemployment compensation tax data Dept Revenue tax credit information GIS zone shape files from the Agency for Workforce Innovation Florida Legislature Office of Program Policy Analysis & Government Accountability 5

6 Economic Outcomes Varied Enterprise Zone Busines s Growth Employme nt Growth Wage Growth Gulf Co -19.2% -19.8% 9.4% Jacksonville 8.0% -3.4% 22.0% Miami-Dade Co 0.02% -2.4% 15.6% Okeechobee Co -2.2% -9.2% 10.9% Tallahassee/Leon Co 3.0% 0.1% 9.0% Florida Legislature Office of Program Policy Analysis & Government Accountability 6

7 Few Businesses Received Incentives Number of Business es Receiving Incentive Percenta ge Receivin g Incentive Enterprise Zone Number of Business es in Zone s s Miami-Dade 18, (1.6%) County Jacksonville 3, (3.0%) Tallahassee/Leon 2, (3.0%) Co Florida Legislature Office of Program Policy Analysis & Government Accountability 7

8 Few Businesses Received Sales and Use Jobs Credits Tax Business Credit Enterprise Zone es Credits Jobs Miami-Dade Co 136 $12,268,35 4,475 8 Okeechobee Co 25 3,758, Gulf County 25 2,433, Jacksonville , Tallahassee/Leon 3 43,212 5 Co Total 213 $19,179,22 5,765 Florida Legislature Office of Program Policy Analysis & Government 7 Accountability 8

9 Tax Credit Jobs a Small Percentage of Total Jobs in the Zones Tax Credit Jobs Tax Credit Jobs as a Percentage of Total Jobs Total Enterprise Zone Jobs 1 Miami-Dade County 206,429 4, % Okeechobee County 5, % Gulf County 2, % Jacksonville 57, Less than 1% Tallahassee/Leon County 26,573 5 Less than 1% Florida Legislature Office of Program Policy Analysis & Government Accountability 9

10 EZ Coordinators Rate Program Effectiveness Moderate to Low Average Score Program Goal (1 = Low, 10 = High) Attracting new businesses 6.00 Creating new jobs 5.76 Creating new businesses 5.42 Creating jobs for zone 5.21 residents Increasing property values 4.53 Attracting new residents 3.49 Reducing crime 3.32 Florida Legislature Office of Program Policy Analysis & Government Accountability 10

11 EZ Coordinators Rate Program Incentives Moderate to Low Incentive Average Score (1 = Low, 10 = High) Building Materials Sales Tax Refund 7.89 Business Equipment Sales Tax 7.59 Refund Jobs Tax Credit (Sales Tax) 6.83 Jobs Tax Credit (Corporate Income 5.36 Tax) Sales Tax Exemption for Electrical 4.48 Energy Property Tax Credit (Corp Income 4.17 Tax) Florida Legislature Office of Program Policy Analysis & Government Accountability 11

12 Legislative Options Broaden eligibility to expand participation (reduces state revenue) Target incentives to encourage job creation Suspend program for one year, saving at least $18 million Abolish program Allow scheduled sunset in 2015 Florida Legislature Office of Program Policy Analysis & Government Accountability 12

13 Immediate Report Impact Florida Legislature Office of Program Policy Analysis & Government Accountability 13

14 Lessons Learned Measuring is difficult Census now available! But census and crime maps often not the same shape as the zone GIS boundaries fuzzy Property values not a good indicator Lots of overlap with other areas, such as federal empowerment zones Florida Legislature Office of Program Policy Analysis & Government Accountability 14

15 Questions? Kathy McGuire, OPPAGA A link to our Enterprise Zone Report Florida Legislature Office of Program Policy Analysis & Government Accountability 15