Better data and metrics can help us explain why we use incentives and demonstrate if and how incentives help us attain our economic development goals.
Obtaining quality data for the metrics that enable us to tell this story is not easy. It requires resources and commitment, but data management is becoming increasingly important in today’s open government environment.
- Choosing metrics that are aligned with community values
- Considering data sources and availability when selecting metrics to make sure data collection does not require time or money beyond your organization’s means
- Using consistent metric definitions across programs to enable comparisons
- Thinking beyond job counts and identifying additional measures of merit that represent community goals and economic development objectives
For incentive programs, we need to measure the performance of incentivized companies in order to determine program effectiveness and quantify outcomes for our communities. Some basic sources for collecting data for metrics that allow us to monitor and report on incentive compliance and outcomes are:
- Initial application and required milestone reports from the incentivized company
- Surveys and site visits of incentivized companies
- Audits, typically for a small percentage of awardees, to certify expenditures and compliance
- State employment and wage data to validate company-reported information
- Data sharing with the tax or revenue department. Administration of tax-based incentives is often divided between the economic development organization and the department of revenue or taxation, which can mean neither party has all the information it needs to monitor use and compliance. While legal barriers often exist to full data-sharing, states typically have some flexibility in enabling limited data-sharing for purposes of administering and monitoring incentives while still protecting taxpayer confidentiality.