Companies are practically tripping over each other to relocate to Florida because of its alluring beaches and business-friendly approach. At least that’s the picture Gov. Rick Scott painted during a June 24, 2013, interview on Fox News.
"That’s why companies like just today, Deutsche Bank, added 300 jobs right here in Florida," Scott told host Stuart Varney on Your World with Neil Cavuto. "Last week, I was with the Paris Air Show. We have companies from France, companies from Virginia moving to Florida. So it’s clearly working in our state. And I hope you’ll buy a one-way ticket and do your show down here."
Varney chuckled, then pressed for more details. "That’s an invitation I might just take up. Quickly though, Deutsche Bank, they’re bringing 300 jobs to Florida, I think they’re going to Jacksonville. Can you tell me, did you offer them something special? Did you say, I’ll build you an exit off the freeway? No property taxes for a time? Did you do anything like that at all to get them in?"
Scott dismissed the notion. "No, what we do is we make sure we have an educated workforce. You know, you can’t have a lower income tax than zero. Our business taxes are going down every year, so that’s happening. I cut the, I got rid of the sales tax on machinery and equipment for our manufacturers. So every year, we’re trying to make our state a state that no one can compete with because we like jobs. We like businesses. I want to make sure we’re the No. 1 state for your family to get a job, get a great education and afford to live."
We wondered whether Florida nabbed a big jobs deal without offering "something special," as Varney put it.
In a statement tied to the jobs announcement, the managing director of Deutsche Bank Jacksonville hailed the "tremendous support from the state of Florida and the City of Jacksonville," which he said "played a large part in our decision to increase our footprint at this location."
What kind of support? The state wouldn’t tell us, saying that information is shielded from public records laws, but a look at news clips and city council legislation filled in the blanks well enough.
The short answer: money.
Deutsche Bank has received a bevy of state and local tax incentives since starting a Jacksonvillle campus in 2008. That year, Deutsche Bank chose Jacksonville over Nashville, Tenn., and Charlotte, N.C., as the site for expanding two subsidiary companies, according to the Florida Times-Union. The expansion came with the promise of $4.8 million in state and local incentives for creating 1,000 jobs and doing capital investment.
In the summer of 2012, state and local governments offered another $1.45 million to create 260 jobs.
Fast forward to the most recent expansion, which Scott highlighted in his comments. In April, the Jacksonville City Council agreed to partner with the state to offer $2.08 million in tax incentives to Deutsche Bank in exchange for adding 300 jobs over three years.
The jobs would pay about $62,000 a year on average and bring the total Jacksonville workforce to 1,600 by 2016, according to city records.
Under the plan, Deutsche Bank would receive up to $1.8 million in tax refunds through the Qualified Target Industry program, with Jacksonville paying 20 percent ($360,000) and the state paying the rest.
The bank could also recover $140,000 in property taxes based on a pledge to spend $10 million in renovations to its office space and buy new furniture and technology.
Separately, Jacksonville’s Office of Economic Development said Scott has agreed to contribute an additional $140,000 from a pot of incentive money used largely at the governor’s discretion to close deals. Scott's state Department of Economic Opportunity would not confirm whether that is the case, saying only that Deutsche Bank had not yet received any money for the project.
That’s normal, however. State incentives typically are offered on jobs that are actually created, not just promised.
"It’s absolutely worth the investment," said state Rep. Daniel Davis, a Republican who leads the Jacksonville Chamber of Commerce. "You have a little investment up front to invest in the long haul."
A Deutsche Bank spokesman downplayed the role of incentives in the company’s decision, saying "there were numerous factors that led to this announcement of new jobs at our Jacksonville location."
We are not evaluating whether Deutsche Bank finds several things about Florida attractive for expanding its company: the weather, the lack of income tax, etc. We are looking at Scott’s response to a pointed question in his Fox News interview: Did Florida offer "something special" to Deutsche Bank in exchange for 300 jobs?
Scott could have acknowledged that economic incentives were used in the deal. Instead he said they were not.
Records show the company is ready to receive up to $2.08 million in state and local incentives if it hits its job targets. We rate Scott's claim Pants on Fire.
Interview with Jackie Schutz, Gov. Rick Scott spokeswoman, June 25, 2013
Florida Times-Union, "Deutsche Bank looks to add 300 jobs," March 21, 2013 (via Nexis)
Florida Times-Union, "Deutsche Bank to hire 300 in Jacksonville; Rick Scott praises rising tide," June 25, 2013
Florida Times-Union, "City wooing 1,000 new jobs; But may take nearly $4.8 million in funds to attract Deutsche Bank to Southside," May 9, 2008
Florida Times-Union, "German bank picks city for 950 jobs; Jacksonville lands deal with incentive package," July 4, 2008
Jacksonville City Council, Deutsche Bank legislative fact sheet for 2012 economic incentive package
Interview with Rep. Daniel Davis, president of Jacksonville Chamber of Commerce, June 25, 2013
Interview with Duncan King, Deutsche Bank spokesman, June 25, 2013
Interview with Jessica Sims, Florida Department of Economic Opportunity spokeswoman, June 25, 2013
Interview with Sean Pelton, Enterprise Florida spokesman, June 25, 2013
City of Jacksonville Office of Economic Development, "Project Blue Skies" summary, March 20, 2013
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