One of the biggest challenges for economic developers is figuring out how to talk about incentives to people outside the economic development community. Forthcoming tax abatement disclosures as required by GASB 77 are an opportunity to engage in a better conversation on this difficult topic.
Incentive queries often start with a negative or accusatory tone, making economic developers understandably reluctant to initiate a dialogue. However, economic developers are the best resource for quality information on incentives because they have the experience with the projects and the expertise to make sense of complex program information. These facts, combined with the new norm of transparency in government, means that economic developers can’t be on the sidelines during the incentives conversation.
Some steps that may help in preparing to talk about incentives with media, citizen groups, elected leaders and other stakeholders are:
- Connect incentive use to your community’s economic development objectives. Articulate those objectives and explain how incentives are designed to support an overall strategy to improve economic opportunities in your community – not just win a deal.
- Provide context. Standalone project or financial information is often not very meaningful. Context that demonstrates the relative impact of a project or program and how it fits into the community can be extremely helpful.
- Consider your audience. Different audiences want different information. Many community members simply want basic data on what was done, with whom and at what cost. A much smaller, but typically important, group of stakeholders will want detailed insight on process, verification of outcomes, and program evaluation.
- Engage and be a good resource. It’s not time to hide. Economic developers should consider engaging external audiences more actively if the goal is to improve the quality of the policy conversation around incentives. If incentives are discussed only when forced to address a problem, we will be stuck where we are, with all parties distrustful and frustrated.
For more information on GASB 77 and steps economic development organizations should take to prepare for disclosures, please follow these links:
As a reminder, the Governmental Accounting Standards Board (GASB) last year approved Statement No. 77, Tax Abatement Disclosures, which establishes guidance requiring state and local governments to disclose certain information about tax abatement agreements for periods beginning after December 15, 2015.
This post is excerpted from my recent article “New Disclosure Rules and the Future of Incentives” from the Summer 2016 issue of the IEDC Economic Development Journal. You can access the full article here.