Every one of us — young and old alike — has been dealt a bad, if not losing, hand by this economic crisis. Even politicians who were anti-growth have climbed on the “let’s create jobs bandwagon.” We all acknowledge the importance of economic development to our community. I have played the “economic development game” for years from all sides of the table and know what I’m talking about.
To play the “economic development game,” nearly every community and every state has some form of incentive package for qualifying companies. At the state level, while significant incentives are theoretically available, these incentives most often move away from you as you approach, like a mirage of cool water in the blasting heat of the desert. Typical of Tallahassee, all show and little go.
Locally, we have tended to use cash incentives, which are quite real, but often small in the scheme of things.Local cash incentives are small for good reason. Cash is scarce, and it is a credit to our local leaders that they willingly make it available despite so many other pressing needs. Notwithstanding these good intentions, the amounts available are mere chump change when compared to incentives offered by other states and communities or the amount of an investment by an incoming or expanding business. To us local taxpayers, these amounts are far from trivial as all of us struggle evermore to pay the taxes we owe.
I believe there is a way of playing the economic development game in a more effective way — without playing with what few taxpayer dollars remain in the till. It involves the idea of “giving the sleeves from our vest.” In negotiating talk, this means giving the other side something of great value to them that you either never really had or can’t really use.
If a business isn’t really here, doesn’t ever locate here or fails to expand here for whatever reason, we don’t get the tax revenue from their activities anyway. If they do invest and operate here, they are employing people, buying raw materials, raising the tide in general for all of us.
My suggestion is that we seriously consider creating a countywide property tax increment financing district that would:
1) apply to any “qualifying” (so we can exclude strip clubs, adult theaters, pill mills, and the parade of other horrible things) non-residential use that;
2) either expands or relocates here; and
3) create some significant community benefit like paying wages at or above a certain threshold; or exporting some value-added product or service from this area; or generating some other form of tax revenue (sales tax, room tax, etc.) for the community.
Such a business would be granted a tax increment finance benefit that would allow them to take the property taxes that they would otherwise have paid and apply that to their building mortgage (as a form of credit enhancement) or otherwise somehow offset their occupancy costs. The duration of the benefit could be tied to the strength of the benefit given back to the community (the greater the benefit, the greater the time). Doubtless, laws and ordinances need to be changed, but we can handle that.
An incentive like this would be economically significant to a company (meaning that we’ll be in the game with more incentive prone competitors) and is akin to giving up something that we don’t have. In other words, it’s like giving up the sleeves from our vest to get a sport coat. I would hope that our two county governments would favorably consider this approach.
Rex Jensen is president and CEO of Schroeder-Manatee Ranch.