March 29, 2024

Enterprise Florida (finally)

John D. McKinnon | 7/1/1996
Lots of things helped seal the deal for Gov. Chiles' economic development package during the 1996 Legislature: an increased role for international trade leaders, a bigger voice for local officials, a leaner, cleaner organizational structure.

But the strongest selling point wasn't contained in the bill's 300-plus pages. Insiders say selection of veteran executive John C. Anderson as Enterprise Florida's new president and CEO last January gave the governor's economic-development flagship its biggest boost of all. Who knows? Maybe even enough to finally push the public-private partnership through the partisan headwinds that have held it back so far.

In retrospect, observers say, Anderson's appointment helped Enterprise Florida's cause in at least three ways: As president and CEO of Miami's Beacon Council since 1991, Anderson soothed the jangled nerves of Dade and Broward lawmakers, who worry that Orlando-based Enterprise Florida represents a threat to their region's dominance.

As a former Boeing executive and head of state economic development agencies in Oregon, Washington and Texas, Anderson also answered the concerns of legislators who watched Enterprise Florida drift through periods of uncertain leadership after its creation in 1992. Anderson is known as a solid organizer, although the Beacon Council occasionally had been criticized as ineffective on his watch.

Above all, as someone originally recruited to Florida by a group headed by GOP stalwart Jeb Bush, Anderson answered the gripes among some Republicans that Chiles intended to use a newly turbo-charged Enterprise Florida as a political as well as an economic-development engine.

Bush admits that he plugged Anderson's candidacy in conversations last year with Enterprise Florida directors Allen Lastinger, Jr., president of Barnett Banks, and Dick Nunis of Disney. "I believe they sensed they were on the wrong track and sought to bring everyone to the table," says Bush, a former Beacon Council chairman. "Maybe I was part of that process."

Enterprise Florida's board, led by Chiles and Barnett's Lastinger, finally settled on Anderson in January, as the debate over Florida's flailing economic development effort neared a crescendo. Chiles' economic development package had been defeated in the Senate in 1995, largely for partisan reasons. The 1996 session became make-or-break. Anderson's selection "made a great deal of difference because of his experience and background," says Rep. Sharon Merchant, R-West Palm Beach. "It's very useful that he's not presenting himself in a partisan manner," she adds. As a result, the economic development bill not only passed, but wound up containing little of the micro-management for which Florida's Legislature is so justly notorious. That leaves Enterprise Florida with relatively clear sailing, at least for the time being.

The bill, which abolishes the state Department of Commerce and transfers most of its responsibilities to a vastly expanded Enterprise Florida, completes a process that began all the way back in 1989. That's when the state Chamber of Commerce issued a major position paper called Cornerstone that criticized the state's economic reliance on low wages and taxes, and called for more emphasis on high-value-added goods and services, particularly in areas where it already had established a foothold - aerospace, laser technology, medical appliances, even specialized agriculture.

Two years later, a follow-up report urged the state to speed up the process by converting its small Department of Commerce into a public-private partnership. Backers believed a partnership would be better equipped to build on the state's successes by involving existing businesses and economic development officials from the ground up. It might also be able to minimize Florida's strong regional and partisan rivalries, they thought.

Known as Enterprise Florida, the partnership was grudgingly approved by the Legislature in 1992. It was not an instant success, largely because legislators initially handed it only the most difficult parts of its mission - things like venture capital investing and high-tech business creation.

Now, four years later, the rest of the pieces are beginning to fall into place. The 1996 legislation shuts down the 300-employee Department of Commerce and gives Enterprise Florida its basic marketing and international trade functions. (Tourism functions of the Department of Commerce move to a separate, beefed-up Florida Tourism Commission.)

The legislation also includes more financial tools for attracting and building businesses. The most significant: Up to $60 million in new or enhanced tax breaks, many of them to be handed out jointly by Enterprise Florida and the governor's office. They include an exemption for electricity used in manufacturing; sharply reduced thresholds for tax credits for job creation and job preservation; an intangibles tax break for credit card firms; exemptions for more machinery and equipment purchases; and sales tax exemptions for publishers of newspapers and magazines.

A recent report by the Washington-based National Council for Urban Economic Development shows other states like Arizona and Michigan have struggled with the newly popular public-private model for state economic development. But Florida's effort received high marks for carefully tailoring its statewide programs to fit in with existing local efforts, says the council's executive director, Jeffrey Finkle. The 1996 bill appears to give Florida a shot at becoming the first state to achieve a full-scale success.

Anderson points out one other key provision: The bill calls for more economic summits like the one last February that cemented agreement on the 1996 legislation. "I believe all of us that participated concluded that it was just an extraordinarily useful device," Anderson says. "At the end of the day, that may well turn out to be one of the most significant things that comes out of this."

--

Dumping Tax Reform

Unfortunately, it's unlikely Enterprise Florida ever will be able to do much about the basic problems that continue to undermine economic development in the state. Florida is suffering from its slipshod education system, its crime problems and - above all - its fraying crazy-quilt of a tax structure. Figuring out what to do about Florida's tax structure likely will fall instead to another group, thanks to a little-noticed measure that passed on the Legislature's final night. The measure dumps the dirty, dangerous job of tax reform into the laps of a soon-to-be-impaneled citizen board known as the Constitution Revision Commission.

With luck, members of the commission will prove to be better leaders on taxes than the ones who handed them the problem.

The measure, in the form of a constitutional amendment to be placed before voters this fall, would allow the Constitution Revision Commission to again consider tax and budget issues in addition to other types of constitutional changes. The commission, created every 20 years under the state's 1968 constitution, is set to be appointed in 1997. It's important because its proposals go straight to the ballot and don't have to pass the Legislature. But in the late 1980s, it lost its power to consider tax-related issues when antsy state leaders decided they couldn't wait until 1998 for new taxes. They got voters to create a whole new panel - the Tax and Budget Reform Commission, which meets every 10 years - and remove taxes from the Constitution Revision Commission's jurisdiction.

The first Tax and Budget Reform Commission, which completed its work in 1992, produced little except some fine-tuning of the budget process, in part because Democratic members lost their nerve in a key election year. Now feckless state lawmakers want both groups to have the power to consider taxes. The outlook for the Constitution Revision Commission's proposals is unclear at best. An initiative that goes before voters this November would require a two-thirds vote for any future constitutional amendment creating new taxes. That's likely an impossible hurdle for any future tax issue. But the two-thirds-vote initiative might be defeated this fall. And even if it passes, there's a possibility that the courts would determine it doesn't apply to proposals from the Constitution Revision Commission, according to Tallahassee lawyer Steve Uhlfelder, a state constitutional expert.

--

Playing Hurricane Roulette

If it's possible, lawmakers showed even less decisiveness on the critical issue of property insurance during the session. Instead of fixing the problem, lawmakers simply tried to buy more time - a commodity that might not be available any longer.

The most important provision of the 1996 property insurance bill extended the moratorium on withdrawals by carriers. However, insurers were threatening to challenge the new moratorium even before it passed. The original three-year moratorium was adopted in 1993. It expires in November. If the lid ever does come off, many experts predict wholesale withdrawals by carriers. Many companies already are withdrawing as fast as the statutory caps on non-renewals will let them.

"I don't think many of the legislators realize how close we are to absolute disaster," complains John Grant, chairman of the Senate Banking and Insurance Committee, who saw most of his market reform ideas trashed during the session.

--

Other Legislative Measures

Other highlights of the 1996 session:

Underground fuel tank cleanups got back on track, thanks to a bill that ends a yearlong suspension of the scandal-wracked program and establishes higher standards for new cleanups.

Lawmakers approved Secretary of State Sandy Mortham's proposal to lower corporate filing fees by 25% over the next two years.

Most legislation to loosen the grip of health maintenance organizations over patient care was defeated. A measure was approved to give lawyers more incentive to sue HMOs over patient decisions, but it was later vetoed by the governor.

Gov. Chiles defeated an effort led by Associated Industries of Florida to override his veto of a 1995 repeal of the tobacco liability law.

Associated Industries of Florida, the business lobbying group, fought against a measure, probably suggested by workers' comp business rivals, that could have prevented some AIF officials, including CEO Jon Shebel, from operating AIF's profitable workers' compensation insurance subsidiary. The measure prohibited anyone from running a workers' comp fund who had previously operated a health insurance fund that went under. AIF saw its health insurance trust go belly up in the late 1980s [FT, May 1996]. The measure passed the Senate, but failed to pass in the House.

Tags: Florida Small Business, Politics & Law, Business Florida

Florida Business News

Florida Trend Video Pick

Bitter-to-swallow cocoa costs force chocolate shops to raise prices
Bitter-to-swallow cocoa costs force chocolate shops to raise prices

Central Floirda chocolate shops are left with a bitter taste as cocoa prices hit an all-time high earlier this week.

Video Picks | Viewpoints@FloridaTrend

Ballot Box

Should Congress ban the popular social media app TikTok in the U.S.?

  • Yes
  • No
  • Need more details
  • What is TikTok?
  • Other (Comment below)

See Results

Florida Trend Media Company
490 1st Ave S
St Petersburg, FL 33701
727.821.5800

© Copyright 2024 Trend Magazines Inc. All rights reserved.