Since Louise Story published her article in the New York Times, the use of incentives in economic development has become a very hot topic. Central to the issue is determining (or assuring) a positive taxpayer return on investment.
I have also written several blog posts on the subject. My goal was to be thought-provoking, so hopefully you will read them.
Because this is such a trending topic, I thought it might be helpful to save you time and put together a list of articles that provide a reasonable flavor for the discussion. This is a representative list, not a comprehensive one. I apologize in advance if a major article worth noting has escaped my review and would encourage you to provide a link to the missing article in a comment. I promise to read it and sharing the link will enrich the overall educational experience for all readers.
Representative Article List
As I reflect on the topic of incentives, I have three primary questions.
First, are incentives being used to offset weaknesses in a community’s promise (value proposition)? If being used in that way, would residents be better served by investing the money to fix the deficiency rather than mask it over with cash on a deal by deal basis? Is your community properly valuing the non-incentive assets it is bringing to a deal in the project financials?
Second, how can you be certain investing in incentives is delivering a positive taxpayer return on investment? Is your community even attempting to calculate it? Are there practical alternatives to offering incentives?
Is there sufficient transparency in the process that allows for proper stewardship and oversight of public funds and addresses the need for confidentiality to ensure a company is not inadvertently put at a competitive disadvantage?
I wish they could be unilaterally eliminated, but I suspect incentives will always be a tool economic development professionals and elected officials want to leverage to gain a competitive advantage (or mitigate a competitive deficiency).
What are your thoughts? Please leave a comment below.
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