SARASOTA

Florida TaxWatch CEO weighs in on local incentives, impact fees

Zach Murdock
zach.murdock@heraldtribune.com

SARASOTA — The ongoing local debate about economic development incentives and impact fees on new construction should focus on more limited versions of both, the leader of Florida TaxWatch told area business leaders Friday morning.

Economic development incentives, in particular, have dogged both local and state officials this year and last as some state lawmakers took aim at Enterprise Florida and county commissioners raised questions about local business recruitment incentives.

In the aftermath, it has become clear those policies at both levels of government clearly need reforms, said Dominic Calabro, CEO of the Tallahassee-based government finance watchdog group.

"In a perfect world, we wouldn't need them, but it's not a perfect world," Calabro said after addressing members of the Argus Foundation at their monthly lunch at the Bird Key Yacht Club. "I used the extreme example of nuclear weapons. We don't necessarily want them, but we wouldn't unilaterally disarm either. You have to have (incentives) in some way; you have to pay to play, but it needs to be very targeted and strategic."

To do so would mean changes at both the state and local level, though neither has accomplished them yet. The end of the fight over the state's economic and tourism incentives programs in Enterprise and Visit Florida this year suggests the state's programs are likely to "hold steady" until after the 2018 governor's race, Calabro said.

But the local incentives program with the Economic Development Corp. of Sarasota County is still under the microscope after a tumultuous year that began with the County Commission's controversial decision last summer denying an incentives package for a headquarters office of a national roofing company. New Commissioner Mike Moran has led a crusade to dramatically change the county and EDC incentives program since, constantly pressuring the commission to reconsider which companies should receive the perks and how.

Calabro mirrored those comments Friday. Incentives should be tailored very narrowly to specific types of industries and careers that would be an appropriate fit within the local economy — booming robotics industries over basic retail or commercial operations, he said.

"Strategically, sometimes those do make a difference, but you have to make sure the ROI (return on investment) is there," Calabro said. "We support them when they're limited in fashion and can be held accountable."

Impact fees are a similar issue, he added. These fees charged to new developments to help pay for certain infrastructure and critical services, like new roads or fire stations, also have been in the spotlight over the past year.

Sarasota County increased its impact fees in April for the first time in a decade and Sarasota city leaders approved increases to their transportation fees, despite push back from developers on both.

The subject likely will be reopened as both governments study ways reducing or exempting such fees could spur more affordable development.

But governments must be wary of leaning too heavily on impact fees to pay for essential needs as a convenient way around an unpopular property tax increase, Calabro suggested.

"Some government officials look at it as a way of avoiding a hard decision on property taxes," he said. "You know, people say, 'Go make these wealthy people or builders pay for it all.' But if they're really essential, like roads, it's what we're all paying for with our property taxes."

Instead, Florida TaxWatch could work with the governments here and business groups, like the Argus Foundation, to study the local budgets and try to identify savings. The group frequently produces those reports all across the states and hopes to work even more with local governments, Calabro said.

Although there is no official plan for that, leaders had a preliminary discussion about it before the lunch.

"We're a tool ... We're here to be a resource and help continue your greatness and maintain that trajectory for better things ahead," he said.