Is This Tax Incentive For Big Corporations Something You Should Vote For In November?

One Okaloosa EDC, the public/private partnership tasked with economic development in Okaloosa County, officially began its campaign to extend a tax break for larger companies with a referendum on election day. The tax break called the Economic Development Ad Valoreum Tax Exemption or EDATE, gives businesses a pass on their property taxes and allows them to meet requirements for job creation and wages. Voters approved the tax break in 2004 and extended it once in 2014.

Okaloosa County Commissioners voted 4-1 to put the incentive back in front of the voters on the November 5, 2024 ballot.

What Does the EDATE Referendum Do?

An extension of the tax would continue to exempt qualifying businesses from property tax on land they use for a job site (think manufacturing facility, office, or other similar structure).

In exchange for the exemption, the business would provide a certain number of jobs at a wage of at least 110% of Okaloosa County’s average pay.

The county has paid out a little less than $75,000, a total of a little more than $600,000 owed if businesses keep their word.

County leaders approved 12 businesses for the incentive over the last ten years; nine of those businesses have used it, according to the EDC’s counting. Those businesses, including Beast Code, Props Brewing, and Gulf Air Group, put endorsements on the Jobs for Okaloosa website in favor of the tax break.

The EDC claims some $45 Million in investment has come here from out of the county, and 317 jobs have been created with an average wage of about $60,000 (103.95% of Okaloosa’s Average Wage) over the last ten years. The average salary in Okaloosa County is $57,720, according to the US Department of Labor’s Bureau of Labor Statistics.

The Florida Department of Commerce says that roughly 80,000 people are employed in Okaloosa County, meaning the new jobs account for approximately .3% of Okaloosa County’s workforce.

Arguments for the Tax Break

One Okaloosa EDC started its campaign to re-up the tax for the second time by sending a press release to news media touting the benefits of the tax break to the overall economy. The incentive has the full support of all four area chambers of commerce, as well as the Building Industry Association of Okaloosa-Walton (BIA) and Emerald Coast Association of Realtors (ECAR). The campaign, called Jobs for Okaloosa, describes the exemption as “a tried and true performance-based incentive designed to create high-paying jobs and foster business expansion in Okaloosa County.”‘

Okaloosa’s neighbors – Escambia, Santa Rosa, Walton, and Bay Counties have a similar program in place, according to a WUWF article from 2022, when Escambia’s was renewed.

According to the tax break’s supporters, a University of West Florida Haas Center study “tallied the return on investment to Okaloosa County at 663%.” However, it did not give specifics on where the money went in Okaloosa County.

“It should come as no surprise that getting these seven organizations to come together to support the renewal of this vital economic development tool was remarkably easy.  Quality jobs are foundational to a healthy economy, and with our neighboring counties offering an EDATE incentive to facilitate new employment opportunities, we have to do everything we can to insure [sic] that we remain competitive”, said Nathan Sparks, Executive Director, One Okaloosa EDC. 

Arguments Against the Tax Break

We did say at the beginning of this story that the vote to put the incentive back on the ballot was 4-1.

Alone in his vote but not in his concerns about the tax break (Chairman Paul Mixon shared some of his misgivings but voted to place the measure in front of voters), Nathan Boyles noted several of his concerns, which have arisen since he voted in favor of putting the measure on the ballot ten years ago. Among those concerns are the administrative costs of the program, a change in the economic climate in Okaloosa County, and the anticompetitive nature of the tax to local small businesses already operating in Okaloosa County in favor of larger, out-of-town companies.

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“I certainly understand that the kind of business recruitment market is very competitive these days,” Boyles said, “The EDATE program requires a disproportionate amount of administrative and legal effort, which is a taxpayer expense at the end of the day – and the math from the history of the program over the last ten years does not substantiate a good a return on that investment, in my opinion.”

Furthermore, Boyles argued the county is in a better place than it was ten years ago. “I certainly shared the view of many others that we needed every possible tool available to attempt to bring and or maintain high wage jobs within Okaloosa County, in part in an effort to create opportunity and to bring down the unemployment rate,” Boyles said, “It’s really a it’s a combination of being in a different economic condition and having data to evaluate, and thinking critically about what’s the proper role of county government in incentivizing businesses or job creation. I’ve evolved to think that our primary function really is, and should be, to stay focused on excellent quality of life for our citizens, low taxes, and great infrastructure.” Boyles continued, ” If we can do those things and be a great community to live in, then that, in and of itself, is a natural attractor of businesses and business owners who will want to be in our community and do business from our community.”

Boyles concluded by bringing up his own business, Adams Sanitation, which he grew from a company of two and a half employees in 2018 to a company of more than 100 employees – without a tax incentive. HJe says he and his wife “invested significantly in capital within the communities that we serve here in Northwest Florida, and a program like this is not a great fit for your average local or small business.”

Boyles added that the last company to receive this tax break from Okaloosa County is a French company that receives much of its income locally from federal government contracts. “the profits that will be generated at the end of the day will be ultimately finding their way back to another country,” Boyles concluded, “I’m not sure that it’s, you know, the most appropriate use of local tax dollars here in Okaloosa County to buy down the cost of business for a French company doing business with the federal government using our hard-earned federal tax dollars.”