36174785-collecting-data-for-incentives-compliance-and-evaluation

We all want to know whether our incentive programs work well, but we often lack quality data to make that assessment. This post describes some basic sources for collecting data to help economic developers monitor compliance and determine effectiveness.

Information from the incentivized company

• Application – The application process provides an opportunity to obtain information you need to establish a baseline and define projected levels for the results (jobs, wage levels, investment, other) you are trying to achieve.
• Reporting – Requiring companies to provide regular reports on major milestones for specific results is the most direct method of obtaining data. Keeping reports simple, online, and integrated into a database or CRM system helps manage the data so it is useful for both monitoring and external reporting.
• Surveys – Good surveys can be difficult and expensive to implement but may be useful for obtaining supplemental data not collected through regular reports.
• Site visits – Visiting a site to verify implementation and identify “observable impacts” is a good option for real estate, community development, and infrastructure projects.
•  Audits – Some incentive programs require audits to certify expenditures and compliance prior to providing payments.

State administrative records

Workforce data – Economic developers can seek access to select state data from unemployment insurance agencies or labor market information entities on employment and wages in order to validate company-reported information. See the CREC report “Balancing Confidentiality and Access: Sharing Employment and Wage Data for Policy Analysis and Research” for great guidance on how to overcome challenges that inhibit data sharing among agencies.

Tax/revenue – 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 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.