Truth About Incentives – Space Coast needs effective tools

The Truth About Incentives – the Space Coast needs effective tools to compete for business.

Published in Florida Today, February 17,  2013.

If the Space Coast wants to remain a contender in the increasingly competitive world of economic development, it needs a full set of tools, its all about the truth about incentives.

One of those tools is getting its moment in the spotlight: truth about incentives for business relocation and expansion.  What strikes me about much of what’s being written and said about incentives is how incomplete it is, often missing key elements such as how incentives are just one part of the multifaceted economic development process, and also how serious and thorough the checks and balances are that govern them.

Even how well they work seems to be lost in the clamor.

Written by Kevin Gholston, Guest columnist

As the former CEO of a Space Coast manufacturing company that was twice approved for ad valorem tax abatements, and now as chairman of the Ad Valorem Tax Abatement Council, I have seen incentives from inside and out. I know they are a responsible, effective way of strengthening our economy with little downside risk.
In 2005, after my company was awarded our first AVT abatement to relocate, we received the credit on our tax bill that this incentive brings after we hit our job creation and capital investment milestones. An AVT abatement is not a direct payment to an eligible company.

Truth About Incentives

Again, let’s be clear: The company must perform on its promise to hire and implement capital improvements in order to get this credit on subsequent years’ property taxes.

On the flip side, in 2007, faced with slowing growth as part of the natural ebb and flow of business, our company could not reach the necessary employment levels, so we received no AVT abatement. This proves the program works. If a company awarded an incentive fails to meet specified performance metrics, the company gets no rebate.

And, keep in mind, the companies do pay taxes. An AVT abatement represents a reduction in property taxes, not their elimination. School taxes, water management, special district taxes and other important community assets are not affected by the AVT. Companies pay these taxes in full.

Another key point is that, for smart, strong businesses, incentives are merely the icing on the cake. Businesses consider numerous factors and attributes when choosing a location in which to expand or locate. Fortunately on the Space Coast, we have many of those advantages, from our skilled workforce and competitive wage structure to our strong education system and unparalleled quality of life.

But like every other state, all of which are competing for the small pool of location or expansion projects, we do count incentives among our available tools. And rightfully so, because we’ve seen how effective state and local incentives can be in terms of job creation and, in some instances, additional expansion that leads to more job creation.  We can see the effectiveness of the program with such companies as Embraer Executive Jets, AAR Airlift Group, Professional Aircraft Accessories and Lockheed Martin Aerostat. They all have met or exceeded their respective job creation milestones to date.

In order for us to remain competitive and continue to build our diverse, healthy economy — one that we have already boosted during the last year with more than 2,000 announced jobs and $341 million in new capital investment — we must ensure that incentive programs are clearly understood and remain an active part of our economic development arsenal.


Gholston is chairman of the Ad Valorem Tax Abatement Council at the Economic Development Commission of Florida’s Space Coast.

Kevin Gholston

Kevin Gholston

Subject Matter Expert in MIL-STD-810, ITAR & Export-Compliance and Quality including ISO9001:2015, AS9100D and AAR M-1003

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