9-economic-development-must-dos-related-to-tax-abatement-disclosures

Economic development leaders gathered recently to consider the implications of forthcoming tax abatement disclosures. While considering tax abatement disclosure guidelines in relation to our work as economic developers and the nuts and bolts of reporting and compliance, we spent most of our time on communication – specifically how best to talk to colleagues, elected officials and the public about disclosed data. From the Smart Incentives perspective, we suggest the following:

Do now

1. Communicate with government finance staff and/or budgetary officials to share data
2. Consider how multiple stakeholders will use and react to the disclosed information in your government’s financial statements
3. Gather ROI analyses and program data related to expected and achieved benefits

Do when financial reports with disclosures are released

4. Supplement the financial disclosure footnotes, which will describe only the fiscal costs of tax abatements, with information on expected benefits
5. Be prepared to answer questions on the decision-making process when abatements are granted 
6. Demonstrate how tax abatements are connected to your community’s economic development objectives
7. Engage and be a good resource when queries arise

Do over time

8. Align disclosures with your own reporting on economic development activities (annual reports, for example) to ensure consistency
9. Develop a template or consistent method of providing both the required disclosures and any supplemental data
10. Streamline and standardize data collection and reporting procedures to enable consistent, quality communication with multiple stakeholders on incentive use

This post is based on information prepared for the GASB Incentive Workshop, facilitated by Ellen Harpel of Smart Incentives and Bob Lewis from Development Strategies and presented at the IEDC Fed Forum in Washington, DC.

For more information on this topic, see “New Disclosure Rules and the Future of Incentives” from the Summer 2016 issue of the IEDC Economic Development Journal. You can access the article here.