The Florida Growth Fund Program likes what it sees in Pinellas County’s rapidly diversifying economy. According to a report issued by the state’s Office of Program Policy Analysis and Government Accountability (OPPAGA), the fund more than doubled its investments in Pinellas County companies between fiscal year 2018-19 and fiscal year 2019-20, increasing its stake from $15.2 million to $32.8 million.
Established in 2008, the Florida Growth Fund Program is a mechanism for the State Board of Administration (SBA) to invest up to 1.5 percent of Florida Retirement System Pension Fund (FRS) assets in technology and growth companies that are based or have a significant presence in Florida.
“It’s the SBA trying to maximize their return on investment,” said Mike Meidel, director of Pinellas County Economic Development, in an interview with the Catalyst. “The beauty of Pinellas is we are diversifying our economy. And we have more opportunities in these industry sectors than we’ve ever had before — it just continues to grow.”
The spike in investment dollars is no fluke or anomaly, Meidel added. It coincides with other positive economic trends in the county, particularly the rising number of people employed in technology, professional services and financial services. Also, he said, IRS data shows migration trending in the right direction.
“The people who are leaving Pinellas County have lower incomes than those who are arriving,” he said. “We’re gaining net worth from the people who are moving here.”
Indeed, according to IRS data from 2017-18, the most recent set available, the adjusted gross income of the population outflow was $1.5 billion, while AGI of the inflow was $2.32 billion.
“Success begets success,” Meidel said. “When people see companies moving here, or they hear about somebody down the street who just decided to move to Florida, you start looking at it yourself, then you find out there’s no state income tax … that’s a big driver right now with so many states trying to expand revenues by taxing wealthy individuals. And so they flee for areas that have good quality of life but also don’t take away their income. And then in our case, they buy expensive properties and improve them. And that improves our tax base, which is our property tax base.”
In essence, the Florida Growth Fund Program’s increasing bullishness toward Pinellas is a reflection of the virtuous cycle that Meidel described. Even amid a pandemic, he said, “Everything is firing on the right cylinders right now. We just haven’t seen as big a downturn as some other areas.”
Other Tampa Bay counties either retained their same amount of Florida Growth Fund Program investment or increased slightly from 2019 to 2020. Manatee County held steady at $6.8 million, as did Sarasota County at $13 million. Investment in Hillsborough County companies, meanwhile, rose from $122.1 million in 2019 to $135.6 million in 2020.
In case you’re wondering, Palm Beach County receives the most investment from the Florida Growth Fund Program, at $208.8 million. That’s up from $177.5 million in 2019.
According to the OPPAGA report, as of June 30, 2020, the program has made commitments to invest $827.2 million in 62 technology and growth companies and 43 private equity funds. The returns on those investments have resulted in a distribution of $540.1 million to the Florida Retirement System Trust Fund.
And the benefits don’t just extend to retirees. According to the OPPAGA report, companies receiving program investments reported creating 19,794 Florida jobs as of June 30. Fund managers reported that current investments that created jobs paid median annual wages ranging from $17,000 to $121,098, with the majority of median wages exceeding the state’s 2019 overall median wage of $35,838.