• Elected officials and community groups are demanding better data on incentive costs and benefits. New tax abatement disclosure rules for state and local government (GASB 77) are one manifestation of this trend toward greater transparency and accountability in incentive use. Will these disclosures fundamentally change how economic development incentives are used? In my opinion, the broader trend toward greater transparency will have more lasting consequences than the specifics of the GASB disclosure rules. Still, these disclosures will change the public discourse around incentives. My expectation is that GASB will have the following effects: Some...

  • In the framework that we use, we think of disclosure and reporting as being fundamentally about 1) transparency and 2) accountability. There are many difficult data and methodological issues associated with these terms, but boiled down, we see a focus on the following basic questions: Transparency How much are we spending? Who is receiving incentives? When there are calls for greater transparency in incentive use, people are generally seeking information about these two essential issues.  Accountability Accountability is more about what has been achieved as a result of our incentive spending. People...

  • This post is an excerpt from "Cost-Benefit Analysis of Investment Incentives" in Rethinking Investment Incentives. Trends and Policy Options.  Cost-benefit analysis of investment incentives can help economic development and government leaders make better decisions when using incentives to attract investments. Assessing project benefits and strategic value, estimating fiscal impact, and modeling the economic impact of a proposed investment will direct resources to the most promising opportunities while limiting exposure to weak projects unlikely to generate net benefits. Employing cost-benefit analysis and other data and analytical tools can also shift the...

  • The negative narrative on film incentives as an economic development tool seems to be set, but the story contains some interesting nuances.  Film incentives continue to come under fire, with another study calling into question the economic benefits of these programs. This post reviews the study’s results and approach and is part of an occasional series examining reports evaluating state and local economic development incentive programs. Findings The study by USC professor Michal Thom examines the effect of state motion picture incentive programs on a set of industry-specific labor and economic...

  • The 2016 US Investment Monitor report released this month by Ernst & Young analyzes mobile capital investments from the past year and offers several interesting findings.  Mobile capital investments include headquarters, data and call centers, manufacturing facilities, distribution centers and research facilities. One takeaway is that high levels of capital investment are not often accompanied by high levels of job creation. A related point is dominance of the chemical industry in the capital investment tallies. Finally, there are few truly big projects, with the majority making capital investments under $9 million and projecting...

  • Economic development incentives have been on the agenda for many of our colleagues and partners around the country this summer. Here is a rundown of some of the latest work. Darrene Hackler presented "Using Incentives Effectively - the National Perspective" during a webinar for the California Association for Local Economic Development (CALED). You can download her slide deck here.  The Center for Regional Economic Competitiveness kicked off the Data Sharing for State Policy Making and Program Evaluation Initiative, which will help states design and implement plans to improve data sharing in...