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Credit: Universal Orlando In the state of Florida, there is a special program that provides tax breaks to help its communities that are struggling with poverty and crime. But it appears it has been used to help Universal Orlando Resort the most, and there are some now going on the attack to see it put to an end as Florida braces for a major financial shortfall due to the pandemic shutdowns.
Created in 1997 and put into effect in 1999, Florida’s Urban High-Crime Area Jobs Tax Credit Program was intended “to encourage employment opportunities in inner cities,” quotes the Orlando Sentinel from legislative records, and there is now a push by some lawmakers in the Florida Legislature to expand the program to help businesses recover from the pandemic shutdowns.
Cities and counties were able to draw an area of up to 20 square miles marked by high poverty, low employment, deteriorating buildings, and extensive crime. The deal then became that if certain eligible businesses were to move within those areas, they could then receive tax breaks for up to $1,500 for each person they hired.
Early on in the process, theme parks were added to the list of eligible businesses, and then a large high-crime area was drawn between Downtown Orlando and Universal Studios Florida theme park in which Universal Orlando Resort decided to build Islands of Adventure.
Over the past 20 years, Universal Orlando Resort and its hotels have grown both in their offerings and their employment within the area, adding CityWalk and Universal’s Volcano Bay in the process.
According to the Florida Department of Economic Opportunity, Universal Orlando has received almost $13 million in tax credits over the years through this program, and its hotel businesses received almost another $5 million.
The hotels also filed for $250,000 in 2019 tax credits this past April just before laying off a large portion of their employees.
While there is nothing illegal about what Universal Orlando Resort is doing, and while it could be argued that the tax breaks will actually ensure more Team Members remain employed, the Sentinel shares that there are some who don’t think that Comcast Corp.–the owner of Universal Orlando Resort–and other corporations should not have such privileges.
Related: Universal Orlando Is Operating at 25%, Says Comcast CEO
Former state senator from Tampa and one of the sponsors of the original legislation, James Hargrett, said lawmakers never intended to subsidize a big theme park.
“The intent of the legislation was for the credits to be focused on businesses located within the depressed areas,” he said.
Darien Shanske, a law professor and state and local tax expert at the University of California, Davis suggests that Florida’s state government should collect more revenue from larger businesses by suspending or repealing tax credits.
It makes sense that one of the highest employers in a high-crime area receives the most tax credits in a program almost solely based on the number of people employed in the area. However, it also makes sense that after 20 years there be some reevaluation of this program. Especially after Universal has worked to develop the area over the past two decades and as state economists expect the Sunshine State to face a $5 billion deficit over the next two years.
Universal did not respond to the Sentinel’s requests for comment.
For the full story, visit Orlando Sentinel’s article here.