We use incentives to achieve our community’s economic development goals.
These goals may vary by location and even by incentive program, but might include promoting more or better jobs, helping businesses grow, increasing investment in our communities, revitalizing neighborhoods or redeveloping brownfield sites, and strengthening the tax base – among others. They key point here is that incentives should not be just about winning a deal.
However, one of the biggest challenges we see is the lack of clearly defined economic development goals either overall or within incentive programs. Incentive program purposes are often vague, difficult to measure, and become less focused over time. It becomes really difficult to figure out if incentives are effective because it’s not clear what they’re supposed to be effective at.
On the other hand, there are big gains to be made here without a huge expenditure of resources just by clarifying what the programs are trying to achieve.
Start with a review of your entire portfolio of incentive programs. We often think programmatically, not holisticallly. And in thinking programmatically, we’re often focused on procedure and rules rather than outcomes. Think more like an investor with a portfolio than a program manager. What are the returns you are looking to achieve from your investments?
Second, consider the stated purpose and written rules of individual incentive programs. What are the guidelines and how can they be harnessed to your community’s goals?
Third, review how the program has actually been used in recent years. What has it incentivized and how are those projects going? What are they accomplishing and what areas of your community are they benefitting? Where are the gaps or shortfalls?
Going through the steps outlined above will enable you to articulate the connection between your portfolio of incentive programs and your community’s economic development goals.