Comments on PCB CCS 17-01
By Paul Henry
February 7, 2017
Mr. Chairman, I’m speaking today as both a lobbyist for the Liberty First network and also as your neighbor in Jefferson County. I’ve seen firsthand the end result of so-called economic development via government incentives and will address them shortly. In the interest of time, I’m only going to touch on three areas of this 172 page bill: The DEO, Enterprise Florida, and Visit Florida.
The DEO is 63% funded by so-called federal money. This is money taken from taxpayers that they cannot use on free market economic development- something we used to do in America. It goes through several layers of government and then the DEO is yet another, as it redistributes 75% to other entities. Every time another layer of government is involved, the cost to taxpayers goes up. Programs such as the federal CDBG have an almost 40% overhead before anyone gets any help. Middlemen make millions from this bloat. Mr. Chairman, I’ve seen it happen in Jefferson County and I’m working on a locally funded and operated program to replace these inefficient ones.
$105 million went to housing programs such as the FL Housing Finance Corporation. In a December 2016 state audit it was revealed the FHFC spent $52,000 on ONE lavish dinner, with over $37K coming from the taxpayer via the agency. The agency spent over $440K on employee bonuses. When I was a Sergeant on the highway patrol, I would have loved to be able to give my hard working troopers a bonus. Like other state employees, they did without and continue to do without.
$74 million went to Visit Florida. Most of us know about the $1 million video of all of the girls in swimsuits. In Jefferson County where I live, VF gave the local people a grant of several hundred thousand dollars last year. What did they do with it? They promoted the county of 14K people in places like Canada and Germany. Great work if you can get it. Meanwhile the state demographic office predicts we’ll see about a 6% population growth over the next 20 years- about 800 people.
It’s too easy to spend other people’s money.
A December 2016 OPPAGA report documented how Enterprise Florida is overly dependent upon the taxpayer. It’s supposed to match public funds with private funds, but the report showed taxpayer money was used at a 10:1 ratio: $20 million in taxpayer money to $2 million in private money.
Visit Florida is addressed. They are mandated to spend $1 million on marketing research to attract veterans to the state. Mandatory minimum spending eliminates the need to be frugal with the taxpayer’s dollars. OPPAGA’s report noted it’s difficult to distinguish the gain from all of this taxpayer money vs what the private sector spends attracting visitors.
It’s too easy to spend other people’s money.
In a November 2013 piece in Governing magazine, Mark Funkhouser, a former Mayor of Kansas City Missouri detailed who loses when governments try to outspend each other for economic development. It is the taxpayer that loses thanks to gambles that many times do not pay off. Our state constitution is very clear on things such as this- Article 7 Section 10 prohibits the use of taxpayer money for most private projects. Chapter 125 conflicts with this great idea, and since there is no supremacy clause, the constitution is nullified.
I’ll focus now on the end result of this anti-free market activity in Jefferson County. Mr. Chairman, I’m sure you’re aware of the to this day vacant Harrell Nut Company in Monticello. It promised all sorts of jobs. The taxpayers gave away over $100K worth of land so Mr. Harrell would build it and the jobs would come. Only one person in the commission meeting objected to this- me. Everyone else applauded. Mr. Harrell used this taxpayer-funded gift to turn around and sell to Archer Daniels Midland. He got an interest and tax-free loan from the taxpayer. To this day, not one job was created there.
We’ve given a local resident a taxpayer funded loan of over $600K to operate a small business, and he’s paying no property tax since the county owns the land. Will he have more success in creating jobs than Mr. Harrell’s nuts? I hope so, but there is no guarantee. If he goes bankrupt, the taxpayers of the county are left holding the bag.
Mr. Chairman, I’m sure you’re also aware of the proposed sports complex in Lloyd. This idea began with $9.5 million of taxpayer money, and by the time 74% of the voters rejected it, the cost was over $11.6 million. Due to the massive amount of money involved, I was not alone in my opposition to that one. The people of Jefferson County knew it was wrong to gamble millions of their dollars on what should have been a 100% privately funded project, and they soundly rejected it.
Since we’re talking about money, I’ll put my 2 cents in about necessary functions of government. We’re spending all of this keep up with the Jones money and we forget about necessary things like law enforcement. I spent 23 years with the FHP and the ratio of citizens to troopers has grown almost 50% from when I began. In the 80’s when I worked in Miami, we ran robbery suppression details due to so many tourists being robbed. America is once again a violent place, notably for our law enforcement officers. What good does it do to bring more tourists here when we can’t properly protect them?
Government should treat everyone fairly. Cash or property incentives pick winners, like Mr. Harrell. Tax cuts should benefit all businesses. Again pulling from my FHP experience, I lost a trooper that worked for me when new recruits were paid more than he was after serving over 10 years. The idea was to up starting pay as an incentive to hire more troopers. The unintended consequence was losing experienced ones.
While there are no perfect bills, this bill begins the conversation that we need to have to remove the parasite known as government funded economic development from the wallet of the taxpayer, and I’m optimistic it can be fine tuned as it advances. I’ll close by observing this money is like a drug addiction- and nearly every level of government is addicted to it. Like any unsustainable addiction, at some point it will result in something really bad happening. To borrow a line from the President Reagan years regarding drug abuse, Just say no. To do that, I urge you to just say yes to this bill.