Toyota Mazda announced last week it will invest $1.6 billion to construct a new auto manufacturing facility in Huntsville, Alabama. The state and communities in the Huntsville area are offering an incentive package approaching $800 million. Which incentive elements mattered most to securing the project? Our assessment is that in Huntsville’s case it was three T’s: talent, teamwork and TIF.
- Incentive programs should be connected to but not held fully responsible for overall industry or economic performance. Broad economic indicators should be monitored, but reasonable expectations need to be set on program-specific outcomes.
- Incentives were big news in 2017. The popular conversation was dominated by coverage of the Foxconn investment in Wisconsin and Amazon's RFP for its HQ2 site. Our readers followed these stories closely, but also continued to express interest in ways to use incentives more effectively and responsibly in pursuit of a variety of community economic development objectives. This article recaps our most popular blog posts for 2017.
- One of the concerns with economic development tax credits and other incentives is that their cost will balloon over time, causing fiscal havoc for the issuing government. So what does it mean when these incentives are used less than expected?
The California Competes Tax Credit was created in 2013 with several innovative features. Its objective is to attract and retain high-value employers in California in industries with high economic multipliers and that provide their employees good wage and benefits. What has happened since the first credits were awarded in 2014? Tax Credit Use Credit awards are capped each year for a total allocation up to $780 million over five years. Unused amounts from earlier years can be allocated in later years. In 2016-17 $243.4 million in tax credits were allocated. $528...
- We propose a three-pronged approach to considering incentives ROI that takes into account community and economic outcomes.