Economic Report
3:23 pm
Fri June 20, 2014

Harper: Oil Spill Recovery Act Good For Local Economy

Dr. Rick Harper discusses the Fed's position on inflation and the benefit of Florida's Oil Spill Recovery Act.

In this week’s Economic Report, Dr. Rick Harper begins with the latest from Federal Reserve Chairwoman Janet Yellen.

Credit University of West Florida

On Wednesday, Yellen announced that the Fed will continue its current monetary policy, cutting its monthly bond purchases by another $10 billion per month and keeping its key federal funds rate near zero. Further, she told a news conference that inflation was expected to move gradually back to the central bank's 2 percent target.

“People out there in the economy are seeing meat prices going up 7-8%, dairy prices going up 4%, car insurance 5% and yet Chairman Yellen is saying that inflation is not a problem,” Harper says, adding that some observers in Washington have differing views.

As for whether people should be concerned about inflation, Harper says he’s siding with Yellen in the need for the Fed to be more worried about deflation. “It’s time for the Fed to start thinking about raising interest rates to clamp down on inflation, but it’s not yet a concern.”

Finally, we get an update on the state’s Oil Spill Recovery Act. The bill authored by Senator Don Gaetz provided $10 million per year for three years to the eight Panhandle counties (from Escambia to Wakulla) most impacted by the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

Harper’s Office of Economic Development and Engagement at the University of West Florida has administered the $30 million dollar fund to provide economic incentives to job creators in Northwest Florida.

All of the money in the fund, approved in 2011, has to be (and will be be) spent by the end the current fiscal year ending June 30.

Harper believes it’s been a great incentive program, with the state spending about $3,300 per job created, which is much lower than the typical average of $10,000 spent by the state per job. “It’s been cost effective, a great return for the Florida taxpayer, and it’s been a pleasure to work with those businesses,” he says.

Harper acknowledges that much of the credit for administering the Oil Spill Recovery Act program goes to his colleagues, associate directors Dr. Brice Harris and Phyllis Pooley, who did the lion’s share of the work while he served as Senior Economic Advisor to the Florida Senate over the past couple of years.

As an example of the business projects that benefited from the incentive program, Harper points to Navy Federal Credit Union’s purchase of 4-H property near its campus in Beulah in West Escambia County.  Harper says the fund gave the county the financial assistance needed to resolve the issue of purchasing new property for the local 4-H, clearing the way for an expansion that will create several thousand new jobs in the Pensacola area.

Dr. Rick Harper is director of the University of West Florida Office of Economic Development and Engagement; rharper@uwf.edu.