Bascially "Barranda" asked what I would do different if I were in charge of Economic Development in this region. He asks this question because I spend a fair amount of time criticizing how Economic Development is currently done.
His question is fair and I will do my best to answer it. People who read this blog regularly know my answer; however, those who visit less often may not know how I think we should handle Economic Development.
Here is what I would change as far as local Economic Development:
1. First of all I would stop using Tax Increment Financing (TIF). TIF districts erode the property tax base and are not a good idea.
2. I would next change the local policies on granting tax abatements. First of all most people do not understand what a tax abatement is. Every time a tax abatement is granted to a business this transfers taxes from the business that gets a tax abatement and forces this burden onto all other businesses. I do not like tax abatements in general; I would like to see our local Government stop giving tax abatements entirely and instead lower the overall tax rate for everyone. This will allow everyone to pay somewhat lower taxes and will prevent Government from determining which companies will succeed and which will fail by giving special treatement to certain business by granting them tax abatements. (Please realize that 70% of all new jobs come from small busineses and almost all of the tax abatement dollars go to large companies)
For example our City Council just granted a tax abatement to a McDonalds franchise. Other McDonalds franchises in this City have never received a tax abatemebt; neither has Burger King, etc. Our City Council has relieved one McDonalds location of a quarter of a million dollars of taxes and is forcing other businesses to pay these taxes for this McDonalds.
3. There are several organizations the focus on local economic development. These organizations should be combined into one or two organizations and they should be streamlined so they do not consume a lot of tax dollars. They should focus on making recommendations to local government that would allow companies to grow (Changing zoning rules etc), on educating local business owners on sources of funds available to business owners from Indaina and the Federal Government, and on marketing this region to new business owners. We should advertise that we do NOT grant tax abatements and that all business owners can expect to pay one consistent (and lower) tax rate.
4. I would next focus on zoning, land use, and needless regulations that impede business in this city. We need to trim the size of local Government and create a small set of rules that are enforced conistently.
The above four steps would ge a good start.