The extent of the tax reduction depends on the number of new jobs created and the level of average salaries. Retail companies are not affected. The program has been in place since 2004.
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Palm Beach County voters will decide this month whether to continue a 30-year-old program that provides property tax relief to new or expanding businesses. The goal of the Economic Development Tax Exemption Program is to attract new businesses to the county and provide incentives for existing businesses to expand.
A yes vote would extend the program for another 10 years. A no vote would see it expire on August 31. Early voting begins on Saturday, August 10. In-person voting will take place on Tuesday, August 20.
The ballot question, which received little attention from county government before appearing on voters’ mail-in ballots, is the county’s only question appearing on this year’s primary ballot. The Business Development Board of Palm Beach County (BDB) is urging voters to vote yes, said Kelly Smallridge, the agency’s president and CEO. Businesses looking to relocate to the county regularly contact the BDB, whose job it is to recruit and promote businesses in the county, to find out what incentives might be available.
“It gives the county another tool to attract a company that will create a lot of jobs,” she told the Post. “And when the tax exemption ends, the company has to pay the property taxes, whatever they are, with no further reductions. A company could say it wants to come, but Tennessee, for example, offers very attractive incentives. This program would allow us to compete with other locations.”
The reduction or tax relief can last between one and ten years and can only be granted at a public meeting of the district commissioners.
“The more jobs there are and the higher the wages, the higher the exemption,” Smallridge noted. West Palm Beach and Palm Beach Gardens, like other counties in the state, have a tax abatement program for new or expanding businesses.
How does a company qualify for the tax credit program?
To qualify for the county deduction, the business must “make a positive contribution to the county’s economy.” Decisive factors include:
- Number of new jobs
- Average wages
- Amount of capital investment
- Ecological damage
“Special consideration” is given to businesses expanding into or located in the Glades area, which includes Belle Glade, South Bay and Pahokee. The tax break does not apply to property or school district taxes. Retail businesses are not eligible for a reduction.
The program has been used six times in the past decade, generating more than $428 million in investments, creating 1,091 jobs and estimating the economic impact over the next five years to be more than $5.7 billion, according to a report the Department of Housing and Economic Development presented to county commissioners on March 12. The tax abatements totaled $6.2 million, according to Sherry Howard, deputy director of the agency.
To ensure that the jobs created match the promises, annual audits are carried out, she said.
Proponents claim that the beneficiaries of the tax relief will create jobs and economic growth
One of the biggest beneficiaries so far has been Pratt Whitney, a division of United Technologies Corp. that designs, manufactures and maintains aircraft engines, industrial gas turbines and space propulsion systems.
In 2012, the county’s Department of Economic Sustainability asked the commission to approve a $1 million tax abatement to the company, amounting to $143,000 per year for seven years. The tax abatement approved by county commissioners was based on an estimate that the company’s expansion near Jupiter would create 230 full-time jobs with an average annual wage of $81,110. The expansion would also result in the retention of 531 full-time jobs. Pratt Whitney spent $63 million to renovate its existing facility and construct a 190,000-square-foot building. The county estimated the local economic impact over the life of the 10-year tax abatement at $442 million.
The last time it was used was in 2019, when Finfrock built a manufacturing facility in Belle Glade. The company makes prefabricated concrete structures and received a $400,000 tax break in exchange for creating 200 jobs. The building is located on the site of a former prison.
A company spokeswoman said several potential locations were considered when deciding to expand its Belle Glade operations. Both BDB support and the tax abatement program played a critical role in the decision to select Palm Beach County for its new state-of-the-art facility, she said, noting that Finfrock is expected to add 40 new jobs later this month as part of another expansion plan.
Mike Diamond is a journalist at The Palm Beach PostPart of the USA TODAY Florida Network. He covers Palm Beach County government. You can reach him at [email protected]. Support local journalism. Subscribe today.
