We're Not a Company Town
We're Not a Company Town
Florida Rep. Anna Eskamani on tax breaks, corporate power, and Universal Studios' policy influence.
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Back in February, I wrote about a bipartisan, multi-state effort to form a compact against using corporate tax breaks to poach jobs. The basic idea is that states would join together in a grander version of what happened to end the “Border War” between Kansas and Missouri in Kansas City.
One of the lawmakers advocating for the compact is Florida Democratic State Rep. Anna Eskamani. I recently talked with Eskamani, who represents a central Florida district that includes parts of Orlando, about corporate power, Florida’s pandemic response, and the influence big entertainment companies have on the state’s politics. (The transcript has been lightly edited for length and clarity.)
What got you interested in corporate tax incentives and the interstate compact?
I grew up in Orlando as a working class daughter of immigrants and so my family did not have a whole lot of money, but we had a whole lot of love, and my parents worked multiple jobs to make ends meet. A big part of what I do every day in my advocacy is really grounded in those personal experiences.
I didn’t realize until much older in my life the role corporations play in politics. I was taken aback that these companies with really strong brands that people really admire are also doing some really questionable things behind the scenes through policy. As someone who cares about everyday people, the bottom line is if you want to invest in programs that change a person’s life — whether its good public schools or public transportation or affordable housing — it all comes out of the same bucket of money that each one of us contributes to in some way. As I dove deeper into Florida’s budget, and even county budgets, to try to understand how we’re prioritizing some policy agendas over others, I began to see the hands of corporate interests.
I ran on calling out corporations and on not taking their money, which is kind of unheard of in Republican and Democratic spaces, but our campaign took not one penny from the tourism industry — and I’m in Orlando so obviously that’s a big deal. The Central Florida Hotel and Lodging Association endorsed my opponent in 2018. I take no money from fossil fuel companies, I take no money from big sugar, and candidly there have been industries that I’ve become even more critical of in my first two years.
To care about working families means you have to understand where money comes from. Florida has so much silent spending, in the sense that we give away so much money to corporations that impacts our ability to pay for other things. There aren’t that many voices on this, and its in many cases because those who could potentially ask questions don’t understand the issue or take money from these organizations.
You mentioned county budgets, so, on that note, what is going on with Orange County and Universal Studios? (Background here.) So often you see the argument, “well, if we don’t provide this tax break, they’ll go somewhere else,” but the theme park’s not going anywhere.
Right! They’re not going anywhere! And not only that, Universal is now announcing layoffs, and we just gave this company another $5 million. We’ve also committed $25 million through a loan project for a new theme park that isn’t even happening right now, it’s on pause, and they just announced layoffs. Universal and Loews hotel resort, that’s associated with Universal property, they both announced layoffs. Giving money to these companies doesn’t even guarantee that they’re going to keep jobs.
And, I’m not sure if you followed Florida’s quote “high crime tax breaks,” but this is another program that was established through Florida law that is supposed to incentivize job creation in “high crime areas.” And Universal Studios and Walmart are two of the biggest beneficiaries. I would argue that the jobs created by Universal Orlando and Walmart are not necessarily alleviating poverty at this point
Universal Studios has a track record of having a great deal of influence in the process, alongside Walmart and Disney World. I tell folks all the time, I don’t understand how Orange County acts like we’re a company town. I just don’t get it, because we’re more than the theme parks. Their influence in the process is very, very powerful, and so it continues to create this wicked cycle of the county continually bending to what Universal Studios wants, and meanwhile we don’t see the benefit.
What effect has the pandemic had on folks’ realization about the extent of this corporate subsidy problem?
Some of the most well-vetted textbooks and peer-reviewed articles will say, this is not good tax policy, because you’re bending the scales, you’re creating an entire new marketplace within the marketplace, and at the end of the day the evidence is not there that the incentives even attract the business, let alone keep the business. With that said, during this pandemic, I think it’s become super clear who the winners and losers are, and the winners continue to be the large corporations and the losers are everyday people.
To give you a real-life example: We have a part time legislative session that ended in March, so we ended at the beginning of the pandemic hitting Florida. We lifted up many questions, as Democrats, of what are we going to do to prepare for this, and the Republican caucus really didn’t want to talk about it. But the one victory we had was with the tax package.
Building toward the end of session, I asked a lot of tough questions on the tax package at Ways and Means, and I had colleagues who asked questions there too, and then on the House floor we did several amendments on the tax package removing different parts of it. Florida proposed to give away $543 million in tax refunds to the state’s largest corporations while we only gave $50 million to small businesses through our emergency bridge loan program, and so that $543 million, we kept trying to repeal it and reallocate that silent spending toward things like teacher pay and the environment and the business rent tax — basically give our Republican colleagues multiple options of other ways to spend this money.
And so, long story short, none of our amendments passed, the tax package moved out of the House with the same tax breaks for voucher schools, utility companies, for heavy rental equipment, it had tons of special projects in it. And then the Senate actually trimmed it down because of the pandemic. And so it came back to us — I still voted no on it because it didn’t go far enough — but it was definitely a trimmed down tax package. And so there’s an example for you right there of the pandemic causing even the most bought-out Republicans to say maybe we shouldn’t do this right now.
At a county level, there seems to be at the very least a little more public pressure on these issues, yet the county has definitely continued on this path.
Is there any pushback from Florida’s startup community against this stuff? We’re seeing more and more, particularly during the pandemic, how Amazon, Google and Facebook have just eaten the economy alive, and I feel like there should be more noise from that part of the world and there’s not. But are you seeing it?
I think we have many members of the startup and tech community who have benefited from grants from these major companies, and that ties to the wicked cycle of why it is so difficult to challenge corporations. If Amazon is offering you grants, Microsoft is offering you a grant, I think folks get into this dynamic where they have a sense of feeling content with what they’re getting. Especially in a state like Florida where there is so little capital — we don’t have a VC culture here — I think it feels more difficult to find capital, so it makes it more likely to not object to these practices because you might benefit from it.
I would be a fan of creating more resources for startups to be able to benefit from grant programs, versus attracting the big businesses, because that’s where innovation comes from.
This is the first time I’ve done a straight interview in Boondoggle. Did you like it? Hate it? Let me know via email or in the comments. If readers want more of these, I’m very happy to do them.
One more thing: I had a piece in Fortune over the weekend on how states and cities that subsidize Amazon are harming their own small businesses by building up Amazon’s power. My basic message to state and city lawmakers is:
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Thanks again!
— Pat Garofalo