Do Economic Incentives Work?

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BAY COUNTY- The state of Florida and Bay County are constantly looking for ways to create jobs.

One of those ways is to reward businesses with economic incentives for creating a certain number of them.

However, providing these incentives comes at a high cost to both the county and the state.

The state of Florida spends millions of dollars a year on economic incentives. Bay county is projected to spend thousands this year alone. But do the cost of the new jobs outweigh the benefits?

Dr. Jon ward is starting an independent laboratory that will analyze skin and body tissue samples from across the southeast.

He's already invested more than two million dollars in this new venture and looked to Bay County's Economic Development Alliance or EDA for some help last year.

"I asked them what incentives they might have to start a new business and they talked to me about the tax rebate program they had and of course I was more interested to hear more about it," said Dr. Jon Ward.

Neal Wade, the executive director of the EDA, says this type of incentive comes with strings attached.

"They are performance based. In other words, the company has to create the jobs before it can get the incentives and then the incentives are paid out by both the county and the state over a three year period," said Wade.

That was not the case until the county and state learned a costly lesson when they made an agreement with a medical software company called Redpine.

Redpine promised to create 400 high paying jobs in exchange for $750,000 to relocate from Washington state, but the jobs never came.

Redpine closed up shop three months after moving and the former owner filed for bankruptcy.

Bay county and the state have taken him to court, hoping to get the money back.

"You've had one major failure, which was Redpine. That was because the incentives were offered up front and that should not have happened. We do not do that in this EDA. We work with the county and the county's agreed we do not do incentives up front," said Wade.

Wade says they've currently got more than a dozen projects in the works.

"I absolutely believe that the projects we're working, the incentives that are committed by the county, by the state, are creating good jobs for Bay County," said Wade.

Halfway through the year, the EDA says they're more than halfway to their goal of creating 1300 jobs for 2013.

Something Dr. Jon Ward hopes to contribute to by creating more than 80 jobs when he opens in September.

"These are jobs that are paying well above what most people in Panama City are used to being paid. That's what we want. We want good jobs. We want jobs that last that aren't seasonal."

Dr. Ward's new business, CarePath DX, will receive an estimated $415,000 tax refund through the Florida Department of Economic Opportunity, after creating the jobs.