Artificial intelligence | Seminole to give AI company $162,000 if it creates jobs

Artificial intelligence | Seminole to give AI company $162,000 if it creates jobs

In a move that invokes two national controversies — the wisdom of taxpayer incentives for businesses and the risks of cutting-edge technologies —Seminole County has agreed to give a Delaware company that uses artificial intelligence to proctor online exams up to $162,000 in taxpayer money over several years if it moves its operations to Seminole and creates 162 high-wage jobs in the area.

It’s part of the county’s Jobs Growth Incentive program, or JGI, launched about two decades ago that has since paid out nearly $2.5 million in taxpayer dollars to attract companies that offer high-paying positions in specific industries — including clean technology, life sciences, aviation, financial services, homeland security or emerging technologies.

However, Seminole Commissioner Lee Constantine — who solely opposed giving ExamRoom.AI Corp. the incentive money at a commission meeting this month — said the JGI program may have outlived its purpose. And he urged the county to take a hard look at restructuring it.

“They’re coming here anyway, so why are we giving them money?” Constantine said about ExamRoom.AI. “I truly believe that this company is going to be wonderful. And I’m glad to have them in the community, and I welcome them. But I just don’t think the $162,000 is going to make one bit of difference with them coming here.”

Seminole’s approval comes amid a national conversation about AI’s effects on personnel needs, privacy and safety, with the Biden administration recently calling for stricter regulations.

And it comes as the Walt Disney Co. and Universal Orlando also were recently in line to receive financial incentives from the state to create new jobs in Central Florida.

Besides Constantine another Seminole official also questioned the need to give taxpayers’ money to ExamRoom.AI, or other companies, as incentive to relocate. As the city of Lake Mary — which has partnered with Seminole County in the past to split JGI funds — balked at offering the incentive money to ExamRoom.AI.

Lake Mary Mayor David Mealor explained there was a lack of “appetite” among his fellow commissioners to put up taxpayer money for the small company.

The original intent of the JGI program, he said, was to lure high-paying organizations that would provide a long-term benefit to the region. Lake Mary officials did not see that occurring with ExamRoom.AI, he said.

“In the past, the economic incentive activity has diversified our economy and improved the business atmosphere [in Seminole County],” he said. “And we’re not saying ‘no’ to everyone. But we’re simply saying ‘yes’ to the most unique companies that would provide the greatest benefit to the city, county and the region.”

Lake Mary has seen explosive economic growth over the past several decades. Several large companies that offer high-wage professional positions establishing themselves along the Rinehart Road and International Parkway corridors, including AAA, ChaseBank, Verizon, Scholastic Book Fairs and Orlando Health.

Four county commissioners — including Bob Dallari, Andria Herr, Amy Lockhart and Jay Zembower — approved giving ExamRoom.AI the money.

“It is about jobs,” Dallari said. “It is about growing the employment base of this county. … And this is all performance based. So if you don’t perform, you don’t get the check. And there have been some companies that we supported that have not performed, and they did not get the checks. That’s the reason we have these checks and balances.”

According to the incentives contract between Seminole and ExamRoom.AI, the company would receive $1,000 for each new full-time position created and in place for at least two years. The average annual salary of each of the jobs is $74,605, or nearly $18,000 greater than the county’s annual wage of $57,624, according to state data.

The jobs will be mostly in engineering and software development, according to the company’s application to Seminole. The first 35 new jobs will be created by the end of 2024, and the total 162 positions will be in place by the end of 2028.

ExamRoom.AI currently employs 378 people around the world, including four in Florida, company executives said. The county plans to establish its global headquarters in Lake Mary by moving staff to the area from Pennsylvania and Delaware.

The company also said in its application that it plans to invest nearly $1.6 million, including nearly $1.4 million in lease and lease improvements and $210,000 in additional equipment. ExamRoom.AI currently has a net worth greater than $5 million, according to company documents.

The company provides remote proctoring for organizations when their employees take online exams from a remote location, such as from home. The testing could be for licensing, credentialing or classes.

“Whatever you need to take a test for, you can do it from home, and our company is responsible for monitoring candidates through their computers,” said Amanda Jayakeerthi, general secretary and treasurer of ExamRoom.AI. “It will detect if the test taker is pulling up other tabs, looking at other people in the room or sounds. It will detect if someone tries to sneak a phone or what not.”

The company has operations in India, Serbia, Brazil and Nigeria, company officials said to Seminole commissioners. It plans to expand the exam proctoring for students from kindergarten to high school seniors.

With new advancements in artificial intelligence technology, commissioners questioned whether ExamRoom.AI’s business model will change, leading it to hire fewer people.

Headwinds from national scrutiny on the industry could provide new challenges, too.

President Joe Biden last month, for example, issued an executive order that mandated AI companies “develop standards, tools and tests” to ensure that their systems are “safe, secure and trustworthy” among other requirements.

Jayakeerthi said her company will not be adversely limited with any future federal legislation.

“We’re very focused on safety,” she said. “We’re confident we’ll be fine.”

State and local governments providing incentives to companies to create jobs in certain areas is often controversial.

Albeit much larger than Seminole’s benefits to ExamRoom.AI, in 2021 the Walt Disney Co. was slated to claim more than $570 million in state tax breaks over two decades for its plans to build a regional hub in the Lake Nona community that would have brought 2,000 high-paying positions from California.

That tax break would have been among the largest in state history for a single organization. However, last May, Disney dropped its plans for that Lake Nona project amid a political feud with Gov. Ron DeSantis.

Universal Orlando recently received more than $17 million in tax breaks from the Urban High-Crime Area Job Tax Credit Program that was designed to encourage development and create jobs in impoverished or high crime neighborhoods.

Seminole Commissioner Herr is supporting the smaller incentives for ExamRoom.AI, saying demand for software applications to proctor remote online testing “is going to grow.”

“I view this as a long-term partnership,” Herr said.

Seminole officials said the county’s JGI program, which was established in 2003, has created 3,897 jobs that pay above the county’s average annual salary within 22 businesses.

Companies that received JGI money from Seminole include $850,000 to Deloitte Consulting in 2015 for creating 1,000 new positions, and $510,000 in 2016 for adding 850 new jobs. Central Square Technologies received $33,000 for creating 355 new jobs in 2017. And Aerosim Flight Academy garnered $50,000 in 2015 for 50 new jobs.

However, seven companies — including American Builders Supply, Ram Sales, QuantumFlo and Acme Glass — applied for and were approved for a total of $218,000 to create 242 jobs between 2013 and 2019, but did not receive any county funds because the positions never materialized, according to county records.

Constantine urged his fellow commissioners and county staff to consider “retooling” the JGI program. He noted it will take about two decades for ExamRoom.AI incentive money to return to the county coffers in the form of future property and sales tax revenues from those new positions.

“We need to take a look at this policy,” he said. “Because I don’t think that this is really doing what we intended it to do, which is to bring people here that otherwise would not come here. And that we have a return on our investment.”

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