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State Tax Incentive Program Faces Expiration

Leon County's Working in the Zone event.
Nick Evans
Leon County's Working in the Zone event.
Leon County's Working in the Zone event.
Credit Nick Evans
Leon County's Working in the Zone event.

At the end of this year, Florida’s enterprise zone program is set to expire.  The tax incentives are meant to encourage local business investment.

There are 65 areas in Florida designated as enterprise zones.  Within the bounds of these districts, businesses and residents can take advantage of a number of tax incentives.  It’s mostly sales tax related, but there are a couple of corporate income tax breaks too.  The program began in 1982 as a way to encourage investment in rural and urban blighted areas.  But the program expires at the end of the year.

Rep. Mike LaRosa (R-St. Cloud) was one of a handful of lawmakers in this year’s legislative session who brought forward proposals to extend the enterprise zone program.  His bill made it through the House, but it died down the hall in the Senate.

Ben Pingree from the Tallahassee Chamber of Commerce explains the result.

“The legislation that was in existence to extend the program, died with a lot of other bills, and so this program will terminate on December 31st of this year,” Pingree says.  “It’s been a great program and I encourage everybody to take advantage of it moving forward.”

Pingree spoke at an event set up by Leon County officials called “Working in the Zone.”  The effort aims at educating local business owners about various economic development programs.  In addition to enterprise zones there are community redevelopment areas—these offer property tax breaks, and HUB zones—which are part of a federal program giving businesses favorable position for contract bidding.  Often the areas overlap.  So why didn’t enterprise zones get extended? 

Robert Weissert from Florida Taxwatch, says there’s one point most critics make.

“Well one of the major concerns that has come up in the debate on enterprise zones is about return on investment,” Weissert says.

In a report released earlier this year, Florida Taxwatch points to previous years in which the Enterprise Zone program ballooned to more than $65 million.  But since then the cost of the program has declined significantly.  The organization points to a 2010 measure that dropped tax refunds for condo developers building in the zones.  Last year enterprise zones cost Florida only about $16 million.   

But cost aside, Weissert says return on investment doesn’t tell the whole story.

“It’s quantifying a specific dollar amount, if x is invested, then x times y is returned,” Weissert says.  “That’s a good metric for almost all economic development programs, in fact really all economic development programs, but the enterprise zone programs is unique in that it really is about reducing blight in communities, not necessarily about straight job creation.

Florida Taxwatch wanted minor changes for the program—more transparency, simpler forms—but they were hoping to see it extended.  However, in an increasingly familiar refrain, enterprise zones like many initiatives fell victim to deteriorating relations in the Capitol.

Copyright 2020 WFSU. To see more, visit WFSU.

Nick Evans came to Tallahassee to pursue a masters in communications at Florida State University. He graduated in 2014, but not before picking up an internship at WFSU. While he worked on his degree Nick moved from intern, to part-timer, to full-time reporter. Before moving to Tallahassee, Nick lived in and around the San Francisco Bay Area for 15 years. He listens to far too many podcasts and is a die-hard 49ers football fan. When Nick’s not at work he likes to cook, play music and read.