Defense contractor lands $21 million in taxpayer incentives

By William Patrick | Florida Watchdog

TALLAHASSEE, Fla. — Gov. Rick Scott is taking a victory lap over an announcement of tax incentives by behemoth Northrop Grumman, which pledges new investment at Melbourne International Airport.

But Scott isn’t saying much about the millions of dollars in taxpayer giveaways that helped grease the slide for the aerospace company to expand in a state with low taxes and numerous business advantages.

“This is a huge victory for families on the Space Coast,” Scott said in a statement.

“We’ve worked to grow jobs and opportunities for Florida families by cutting taxes, paying down debt and cutting government waste — and this announcement is a testament to our success in creating an opportunity economy.”

The plan was reportedly two-years in the making, with key aspects kept secret from the public. Thursday, Northrop Grumman was revealed as the mystery firm behind what was previously known as Project Magellan.

The plan calls for a $500 million capital investment that could create up to 1,800 jobs in Brevard County.

“We are extremely appreciative of the support we’ve received from the state of Florida and the local community in our continuing effort to drive our affordability and competitive position,” said Tom Vice, Northrop Grumman’s corporate vice president and president of Aerospace Systems.

Watchdog.org contacted the firm with questions about the incentives, whether Floridians would receive preference in hiring and what states Northrop Grumman considered. We did not receive a return response.

Northrop Grumman will receive $20.8 million in incentives, courtesy of state taxpayers. The firm cleared more than $2.1 billion in profit last year, according to its annual financial report.

Northrop Grumman is also almost entirely dependent on the U.S. government, which accounted for 86 percent of the company’s $25 billion in sales last year.

“We depend heavily on a single customer, the U.S. Government, for a substantial portion of our business,” the company states in its 2013 annual report.

Watchdog.org contacted Enterprise Florida Inc., the state government’s chief economic development agency, for a breakdown of the incentives. The information won’t be public for another six-months, a spokesman said in an email.

“Per state statute, we cannot provide any details relating to state incentives for the Northrop Grumman project announced (Thursday). The confidentiality period for additional project details will expire 180 days after the final project order is signed with the state.”

Open government advocates have long cried foul when it comes to secret dealings between the state government and private businesses. The Scott administration and the Florida Legislature have a history of keeping such secrets.

“The Legislature allows secret taxpayer-funded contracts, which makes it difficult for the public to follow the money,” said Dan Krassner, executive director of the nonpartisan research institute and government watchdog, Integrity Florida.

“There should be more accountability for job results and disclosure of where our dollars are going. Deals like this hide too much from taxpayers and go against Florida’s open-government tradition.”

Scott’s statement, the same offered by Enterprise Florida, thanks Brevard County, which approved a $205,000 incentive; the city of Melbourne; the Economic Development Commission of Florida’s Space Coast; Florida Power and Light; Space Florida, Career Source Florida, which is offering Northrop Grumman reimbursement grants for employee training; the Florida Department of Transportation; and the Florida Department of Economic Opportunity.

Contact William Patrick at wpatrick@watchdog.org