News Column

Orlando Tax Breaks Clear Committee

Feb. 19, 2013

Aaron Deslatte, Tallahassee Bureau Chief, Orlando Sentinel

Here's a formula for defusing the Florida Legislature's public squeamishness this year over its historic pattern of awarding major tax breaks to major corporations: wrap them in sports, space or national defense.

A Senate committee Tuesday unanimously advanced two bills that offer tax breaks to everything from Major League Soccer teams to Lockheed Martin, SpaceX and other defense and aerospace companies.

Although Senate Commerce and Tourism Chair Nancy Detert, R-Venice, said lawmakers should have "learned a few lessons" about whether such incentives work, the panel passed the bills without any amendments and only a few minutes of discussion.

"This is the year when we're trying to look at incentives in a nice factual, reasonable way ... and make sure we're doing things without giving away the store," Detert said.

One of the bills, SB 358, would allow two MLS franchises to get in line for the state's 30-year, $2 million annual sales-tax rebate for sports stadiums that is currently helping to pay for facilities for eight of Florida's nine professional sports teams. Orlando is trying to win a new MLS franchise with the pledge to build a 18,000-seat, $105 million soccer-only stadium, although Atlanta and Miami are other potential southeast expansion sites for the league.

Plans for the new stadium got a boost over the weekend with the announcement that Brazilian entrepreneur Flavio Augusto de Silva has bought into the Orlando Soccer Club with a reported investment of $70 to $80 million. The city of Orlando would put up $30 million toward the stadium, as would the team, with another $25 million in hotel taxes sought from the county.

Senate sponsor David Simmons, R-Altamonte Springs, said the stadium would generate new revenue, so the rebate wouldn't be diverting tax resources from other needs, although that's similar to the argument the Miami Dolphins and Jacksonville Jaguars are making this year to get additional breaks.

"I don't believe that revenue would be generated [without the rebate] ," Simmons said. "[Soccer is] huge in Florida, it's growing across the country, and it's going to be great to have a franchise in Orlando."

Detert had offered an amendment requiring the team to re-apply for the break every five years, but she withdrew it at the request of Simmons and Orlando's lobbyist.

A second tax-break bill, SB 236, carried by Sen. Dorothy Hukill, R-Port Orange, also passed out of the committee unanimously. It would eliminate the $7-million cap on tax refunds through the state's Qualified Target Industry and Qualified Defense and Space Flight Business tax-incentive programs, just as Lockheed Martin and Fidelity National Financial of Jacksonville near the lifetime caps.

Lobbyists for the Florida Chamber, Associated Industries of Florida, Lockheed Martin and SpaceX showed up to support the bill Tuesday, although it did draw brief complaints from one lawmaker on the panel.

"This seems to me to be a lot of continuance of what we've done," said Sen. Jeremy Ring, D-Margate, who still voted for the bill.

Detert asked Hukill to work on the bill as it moves through the process to alleviate concerns that it favored only a handful of companies.

"It's a good idea. But we just can't have it all go to one company. We can't have one giant company come and suck all the oxygen out of it," Detert said.

But Hukill said lawmakers always had the opportunity to change the rules for tapping the tax breaks if they didn't like who was winning and losing.

"We have set the parameters, and the companies are complying with the parameters, and they are creating jobs," Hukill said, adding businesses haven't typically used all the appropriated funding for the job-creation programs and her bill would "support businesses that have done what we've asked them to do."

Source: (c)2013 The Orlando Sentinel (Orlando, Fla.) Distributed by MCT Information Services