The State Economic Development Program Expenditures Database and the State Business Incentives Database are two valuable resources for those who follow economic development. Guest blogger Wen Sun, Research Manager for the Council for Community and Economic Research (C2ER), summarizes recent updates to both databases and offers some observations on key trends she has identified.
Economic Development Programs (Non-Tax)
Based on all 50 states’ Governor's Recommended Budget data for FY2015, states are collectively proposing to spend $7.95 billion for economic development related activities in FY2015, which represents a small increase over the FY2014 enacted budgets total.
A closer look at spending trends broken down by economic development functional areas reveals that states are increasing their investments in workforce preparation and development, international trade and investment, and entrepreneurial development. Specifically:
- Workforce development has become increasingly important, although overall expenditures for workforce development remain lower than pre-Recession levels. There were notable increases in workforce development proposed expenditures in Delaware, Florida, and Louisiana.
- States have been increasing their investments in early-stage tech firms through seed/venture capital programs. Examples include the Advanced Industries Accelerator Program in Colorado and Hawaii’s Strategic Development Corporation.
- Community assistance is still heavily funded but has become less important compared to before the Recession.
- States have been increasing funding and creating new programs and offices for international trade and investment.
The latest update of the State Business Incentives Database reveals tax incentives only account for a small component of newly launched state business incentive programs in calendar year 2013 and 2014.
Among the 36 states that were recently updated, 14 states launched 24 new state business incentive programs, and only 7 of these new programs are tax incentives. To some extent, this supports the growing impression that state investment strategies are gradually moving away from tax based incentives.
Interestingly, nearly all of the 7 identified new tax incentives are investment tax credits that can be claimed based on qualified investment and expenses, not job creation. Additionally, nearly half of these new investment tax credits are designed to provide benefits for the states’ small and early-stage businesses, such as South Carolina’s Angel Investor Tax Credit and Pennsylvania’s Innovate in PA Tax Credit.
Founded in 1961, the Council for Community and Economic Research (C2ER) is a membership organization that promotes excellence in community and economic research by working to improve data availability, enhance data quality, and foster learning about regional economic analytic methods.
The State Economic Development Program Expenditures Database is a compilation of budget data on state investments in non-tax economic development programs that uses a consistent categorization of expenses across states for FY2007 to the current fiscal year.
The State Business Incentives Database is a one-stop resource center for business incentive offerings across the 50 states and the District of Columbia.
The expenditures database is updated every fiscal year and the business incentives database is updated based on a biannual basis.
Both the Expenditures Database and Incentives Database are password protected and only available to C2ER Organizational and Premium Members. However, you can contact Wen Sun (email@example.com) or Sarah Gutschow, Research Analyst, (firstname.lastname@example.org) for more information and a demo.