[snip]
>The following comments are in response to Dave Kraybill's recent discussion
>of tax abatements. First, it is important to note that tax abatements are
>just one type of industrial incentives. It is not my intention to be an
>apologist for industrial incentives, much less tax abatements. However, I
>do think there are some reasonable arguments in favor of industrial
>incentives.
>
>I think Dave's 6 principles are a good place to start a discussion. I will
>respond both the tax abatements and to the more general issue of incentives,
>trying to keep the distinction clear.
[snip]
>Principle #1 - Localities that adopt tax abatements early in the game may
>achieve additional employment growth but subsequent gains disappear as other
>localities begin to play the game.
>
>In general I think that it is very true that competition negates the
>advantages of the early innovator, although not all gains disappear with
>competition if the overall spatial economic system improves as a result.
>This is especially true in the case of non-tax abatement incentives which
>improve the economic climate overall.
[snip]
First, on the light side, this reminds me of one of my favorite quotes:
"the only way to win (the game) is not to play at all"
-- Joshua, the computer in the movie War Games.
Now, more seriously:
It seems to me that the local economic developer is really put into a game
that they must play. That is, they are expected to compete in this "market"
for incentives trying to attract new (big) employers. At the same time,
however, much of what we know about *community* and economic development
would encourage the developer to spend more time on improving the existing
conditions (education, training, attractiveness, etc.). The payoffs for job
performance, particularly political, however favor the tougher tasks of the
incentive-attraction game.
Question: How often do we HEAR about incentives being used on existing
businesses? Is it because it is not as much as a news getter when a
developer helps to bring in an incentive for a business expansion as opposed
to bringing in a new firm? Or is it because many of the states incentive
packages are designed for attraction efforts?
John
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John Holden, Managing Director
Ohio Business Retention and Expansion Program
Ohio State University, Dept. of Ag. Econ., RM 337
2120 Fyffe Road, Columbus, Ohio 43210
(614) 292-5545 (voice) (614) 292-0078 (fax)
Visit us on the Web! At: http://www.ag.ohio-state.edu/~rande
Or send me an e-mail at: holden.24@osu.edu
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Associate Professor
Dept. of Ag. Economics & Rural Soc.
University of Idaho
Moscow, ID 83843
http://www.uidaho.edu/~scooke/onepercent
208-885-7170 (phone)
208-885-5759 (fax)