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Our View

 

Date: March 24, 2011
by: The Observer Staff

 
 

Stop cross-county enticements

Sarasota County has $1.1 million suddenly available to used as economic incentives to lure companies here.

That’s mixed news, at best.

The money is available because the County Commission rescinded three incentive grants it had given to companies planning to move their businesses here. The companies were either not moving forward or had changed their plans.

Sometimes companies’ plans are changed for them.

For instance, it’s all too easy to remember Arthur Andersen’s huge Sarasota County data center, which handled the now-defunct accounting firm’s 80,000 employees worldwide. At its peak, the Arthur Andersen unit employed 1,000 people in Sarasota and was the crowning achievement of economic development.

Sarasota County leaders boasted mightily about nabbing that high-tech prize — until the parent company was undone by involvement in the WorldCom and Enron scandals. All that is left of that is the name of the street, Arthur Andersen Parkway. Some of the jobs stayed with Jackson-Hewitt. Many are gone.

We are reminded of that danger with the three recent rescissions.

The first grant rescinded was for $250,000 to Success Group International, a St. Louis firm that planned to move to Sarasota County and create at least 30 jobs. The company went through a restructuring and decided to stay put.

The other two rescinded grants are disturbing even in the lose-lose game of taxpayer giveaways to corporations.

The first was a $650,000 grant to Winslow Marine Products Corp., which was going to relocate its company to Sarasota County from DeSoto County and create 175 jobs. The company never moved forward with a relocation.

And the final rescinded grant was for $200,000 to Creonix, LLC, to move across the line from Manatee County to Sarasota County and create 105 jobs. Creonix changed its plans also.

Last year, at least three Manatee companies — MyUs.com, RND Automation and Engineering and Sunovia Energy Technologies — were lured across the line to Sarasota County with public incentives. In fact, Sunovia was coming back after moving from Sarasota to Manatee. And last year, Manatee lured Mustange Vacuum Systems from Sarasota with grants and state money.

There is something certifiably insane about public policy that actively calls for Sarasota County to offer tax money to private companies to move south from Manatee County while Manatee County offers its tax money to lure Sarasota County companies to move north across University Parkway.

It’s poor public policy to be giving away taxpayer money to private companies. If we are determined to do this, it is bad enough giving tax money to companies from DeSoto County and Tampa Bay. But Manatee County?

Sarasota and Bradenton are one metro area. There is no net community gain in these relocations. They provide an avenue for EDCs to claim successes and local governments to boast about added tax base and jobs at the expense of a neighbor.

Seriously, can somebody please pick up a phone and say, “We won’t lure your companies if you don’t lure ours.” It’s not even a long-distance call.


Political pension punt

If leadership is best conducted by example, a key Florida Senate committee on pensions is conducting downright pathetic leadership and having real trouble being serious about the state’s long-term financial woes.

This is a problem, especially now, because pension promises for public employees are coming due from the pockets of all of us who do not have such pensions.

Those promises are extracting $3 billion annually from taxpayers and contributing to the state’s weakening financial condition. Plus, taxpayer support will likely increase in coming years without serious reform.

Here’s the way it works right now, and it is sweet indeed if you are a government worker and not just a government funder:

Most government employees are covered under a traditional pension plan that guarantees their benefits after retirement indefinitely. Of course, this option has gone the way of the dinosaurs in the private sector, where most employees use a 401(k) plan to which they contribute.

Public employees, in contrast, can retire with full benefits after 30 years and are guaranteed a 3% annual increase in their pension payments. Further, they contribute nothing to their pensions. Zero.

Public employees in most states still have pensions, as politics is politics everywhere. But Florida TaxWatch reports that public employees in other states must contribute an average of 5% of their salaries to their pensions.

So reasonably enough, Gov. Rick Scott proposed that public employees covered by the Florida Retirement System — which includes non-state employees such as teachers, police and firefighters — contribute 5% as they do in other states. That part of his proposal would save about $1 billion per year.

Scott also proposed putting new employees into 401(k) plans and limiting cost-of-living increases to the rate of inflation. That would save hundreds of millions more.

From the hysterical responses to this common-sense proposal, you’d think he had required every family to give up its first born.

So the Republican-dominated Senate Governmental Oversight and Accountability Committee played raw politics. It approved a bill that would require teachers, police, firefighters and other employees who earn more than $40,000 annually to pay into the pension plan only up to 2% of their salary. (Those under $40,000 would pay nothing.) Those who make more than $75,000 plus all elected officials, would pay up to 4% of their salary toward their pension. No one would pay the 5% other states do.

Further, these pension contributions would only last as long as the Florida Retirement System runs a deficit. If the fund runs a surplus, then the contributions would stop, reverting to the sweetness of zero.

This may be considered a step forward, but it’s a tiny, completely political step, done without any knowledge of how much money would actually be saved.

Yes, senators just reduced percentages and changed rules arbitrarily for political cover. One tip-off of the worthlessness of the “reforms” in this bill is the head of the state police union called the bill “pretty nice” — compared to his description of Scott’s proposal as “pretty ugly.”

When a public-sector union calls reforms pretty nice, you just know the politicians have punted the overall public good again. That is disturbingly irresponsible, mirroring similarly actions in Washington, D.C., where politicians keep punting the necessary decisions down the road for personal political gain.

This must stop.

Scott had proposed realistic changes to the pension system that would have cost state employees more but also would have moved them closer to the entire private sector, which ultimately is paying for this plan. Completely reasonable, and therefore apparently completely objectionable to the political class.

Here’s a fine example from Sen. Mike Fasano, a New Port Richey Republican: “Unlike the governor, this bill does not balance the budget on the backs of state workers,” Fasano said, sounding every bit like your typical, demagoguing class-warfare Democrat.

Even more telling, when an amendment was proposed to reduce the rate at which politicians accrue their pension benefits to the same level as police and firefighters, the committee voted “nay.” Remember, legislators are only part-time employees.

This cannot keep up. We encourage more fortitude to do the right thing in the full Senate and House. Lawmakers should institute real and lasting change we can afford, closer to what the governor proposed. Try thinking of all of all Floridians, not just government employees.


DEMERIT PAY

There is ever more handwringing in Tallahassee whenever the status quo is challenged. That is doubly so for government workers and their increasingly powerful unions.

So when the Legislature passed requirements for performance-based pay for teachers, the reaction was predictable. The media dutifully reported a public “outcry” as though someone was horribly wronged. Democrats howled to please their union financial backers.

Now the latest twist is to charge that the bill requiring exceptionally good teachers to get more money is an “unfunded mandate,” which is something indeed Tallahassee has been known to do — legislate costly requirements on local jurisdictions but not provide funding.

Manatee County Schools Superintendent Tim McGonegal, a supporter of merit pay, said the plan would cost money, and the Legislature approved no money for it. OK.

Here is a suggestion that will make some people’s skin crawl but is perfectly reasonable: Take more money from the worst teachers.

If you can identify the best teachers for merit pay, then indentify the worst ones for de-merit pay and simply shift the funds. Unions make it impossible to get rid of bad teachers, but perhaps they can be persuaded to leave by other means. Students are performance based. Why not teachers?

Of course, the unions would howl, but let them.

If teachers are really the most important people in society, then we should make sure we have and keep the best and dump the worst. Otherwise, the claim is a sham.
 

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