Challenge of the St Johns County economy

Millions of dollars of private funds, and government tax dollars, are spent each year in search of the Holy Grail that will deliver the prosperity that comes from economic development in St Augustine and St Johns County — something every politician is promising but few will admit what will have to happen first.

The Economic Development Council, Industrial Development Authority, Director of Economic Development for St Johns County, a full-time Certified Business Analyst with the University of North Florida’s Small Business Development Center, and a host of other regional and state initiatives say that they are focused on bringing aerospace and aviation, clean technology and renewable energy, homeland security and defense, information technology and life sciences to St Johns County.

Is it possible that the decision makers of these target industries simply see St Augustine and St Johns County as a great vacation place, but not as a place to do business?

A recent report paid for by six of the state’s largest energy providers and conducted by the McCallum Sweeney Consulting firm for Enterprise Florida seems to confirm what local businessmen have been saying for years.

We have thrown so much money into marketing our image as a tourist destination, and to provide incentives and advertising support to create that image, that leaders in other industries, who could help rejuvenate our stagnant economy by relocating here, simply won’t take us seriously.

We have a parallel interest with the Tourist Development Council, Cultural Council, Visitors Convention Bureau, and bed-tax supported tourist industry participants — but, what none of the politicians is willing to tell you is we’ve put all our eggs in the tourism basket.

In a way, everything we pay for in the name of tourism, like the Viva Florida 500, St Augustine 450th Commemoration, and the other tourist promotions designed to temporarily put “heads in beds”, may be directly hurting our chances of attracting diversified, long term, better-paying employers that we admit we want and need to attract.

The study showed that we in Florida received low marks from site selecting consultants for our cost of doing business, our real estate and infrastructure availability and costs, as well as our branding as a “tourist destination” rather than a “business destination”.

In county commission meetings, we hear recurring public comments that St Johns County is not “business friendly” — compared to offers from adjoining counties. Politicians, and bureaucrats empowered by those politicians, adamantly declared last year that “St Johns County is open for business”.

Listen. Shouting down public speakers who are pointing out your shortcomings does nothing to make what you’re saying correct. You can’t brow-beat professional corporate decision makers into believing that you are “business friendly” when the potential employer, taxpayer, and good corporate citizen is being shown a better offer next door.

Observations and suggestions articulated in the report considered Florida’s efforts to attract businesses with competing states such as Georgia, North Carolina and Texas, and surveyed business executives and site selectors.

The overall message from most companies and consultants is that Florida is not on most company’s radar as a viable business location.

Advantages possessed by competing states include sales tax exemptions for manufacturing equipment. Such exemptions were increased by Florida lawmakers this year, but such taxes here remain higher than other states.

Competing states also tie corporate income taxes to a single sales factor, rather than multiple factors such as property and payroll taxes.

Florida’s pool of workers has immense talent, but it’s a factor that isn’t as well-known among relocation consultants. Also, other states have larger incentives for job training, some as much as $10,000 per worker, and provide flexibility for a company to use its own training methods rather than state resources.

What we should have been doing, the report suggests, is cutting manufacturing equipment taxes and corporate taxes, increasing taxpayer incentives for job training and job creation, thereby enticing businesses to relocate or expand here.

Face it, tourism is our largest economic segment. Unfortunately, it attracts people to the area who are transient, it perpetuates minimum wage employment, and, it is seasonal. It would be foolish to abandon our historic heritage, or the value it provides to the attraction, restaurant and lodging businesses; however, without diversification of our economic dependency on tourism, we are standing before a rough row to hoe.