My little community wants to establish something called an "Economic Development Corporation," a 501(c)(3) entity that under some circumstances (but not ours) can glom onto a half-cent local sales tax. It has to operate under open-meeting and open-records laws like a governmental entity, but as far as I can tell it doesn't have any authority. There are said to be 700 of them in Texas already. They look to me like a sort of souped-up chamber of commerce, though I'm told that our local Chamber of Commerce doesn't do the same sorts of things at all.
Actually it's very hard to talk to the supporters about why an EDC would be a good idea. Luckily, ours apparently would be pretty low-risk, since it will have to subsist on modest handouts from local governments plus private donations, and will have no power that I can discover to make anyone do anything in particular. Most EDCs seem to operate pretty good websites with information of the sort that prospective employers would want, like demographics, available real estate, zoning philosophy, educational opportunities, tax abatements or other financial incentives, and links to local elected officials. I thought that was Chamber territory, but apparently not. Or, if it's Chamber territory, the Chamber doesn't have enough money and people to do it effectively. It's surprisingly difficult to get supporters to answer a question like, "Are you going to do what the Chamber does, but more of it and better because you'll have more money and staff? Or are you going to do completely different things, and if so, what?" They kind of look blank and say they're going to do "economic development." What does that look like? Well, it's development. Of the economy. I never understand these sorts of conversations.
On the other hand, I'd be pleased to see someone put together a good website with information that prospective employers would want to know. I've never understood why we don't have one already. You'd be amazed how hard it is just to find basic information about local codes and ordinances. Our local leadership is not what you would call wildly enthusiastic about the digital revolution.
Another question I found it hard to engage supporters on was, "How do we find out whether the 700 Texas cities who have EDCs experience better economic development than the many cities who don't?" I'm told I can easily get a list of the 700. Sure, but you see how my question is different? Not really. Well, the 700 cities worked really hard on economic development, which is obviously a good thing. Right, but concrete results? ... It's as though I were speaking a foreign language. It's just intuitively obvious that this kind of activity, whatever it is, is valuable.
Earlier this evening I managed to find a few articles nearly on point. One was a master's thesis that couldn't find any statistical correlation between imposition of a Texas EDC sales tax and anything identifiable as economic progress. The author admitted, however, that she was unable to put her finger on what people meant by economic progress: was it simple growth in key metrics like per capita income, or something to do with a qualitative change in economic activity? Either way, the pattern was murky. Another article confidently explained that you get economic development when you can attract and retain talent, but that's tricky, because it's the nature of talent that it can relocate whenever it wants, so you have to have quality of life. What's that? Whatever talent wants. Then there's probably something about making the environment business-friendly. That's actually the only part I can readily grasp: low taxes and regulations that are transparent and predictable. But then there is so little consensus on whether it's a good idea to attract businesses if you can't be sure they won't degrade quality of life, as they surely will if they're not heavily regulated! You can't trust those dang businesses! At the same time, the coolest little town ever won't last long if there aren't any jobs. It's a tough one. I remain skeptical that governments can help much. Maybe businesses can't either, but at least they employ people.
Well, as I say, the possibilities for mischief appear minimal.
7 comments:
Well new high point in your blog. Going to be printing this one out and putting it on the wall.
Camel.Nose.Tent.
This is an example, (and I cannot remember the correct name)- of a very small price per each being paid by a lot of people, and a small group receiving the money- it is not worth the time on an individual basis to fight, but results in a nice plum for the few- classic rent seeking, and nearly impossible to get rid of once enacted.
If you want to encourage business, talk to some people in business and see what they complain about. If you have to have a tax, set up a contest and award the money to some start up, or pay their rent for a year, or something. Why give the money to a third party?
On a side note, I get the local business newspaper and it is appalling. Almost without exception, every new business featured is a coffee shop, bakery, restaurant, bar, pot shop,etc- almost never is a manufacturing biz noted.
The construction biz is booming but there is the usual litany of regulations multiplying. Bureaucrats have no conception of the law of diminishing returns- and they seem intent on grinding things to a halt by going for the last .001 percent.
The hiring advice page is absolutely chock full of legal-race-sex compliance advice,to the point where someone would have to be bug nuts crazy to ever hire a minority or woman- all the "protections" offered by the new laws put the employer at extreme risk of a fraudulent claim. Locally, our A+W closed after 50 odd years, some worker made a sex harassment complaint against another worker, management was held responsible and that settlement ate the business. And with the entitled snowflakes our universities are churning out, it takes very little for someone to be "offended". Little twits oughta go set chokers or toss salmon for a summer, do them a world of good.
The Amarillo Economic Development Corporation (AEDC), in my opinion, has been a waste of tax funds. We have several groups that interlock and money seems to pass from one to the other to developers to local real estate dealers and back. We have the soon-to-be-finished "Not A Ballpark," a parking garage, no grocery store near downtown for the people who are supposed to live downtown, and a fixation on people under age 35 doing things downtown. The city has, to their credit, started looking harder at upgrading infrastructure and safety in some older, predominately minority areas, but if you don't live there, or downtown, there's nothing to show for all the tax money. In my observation and opinion.
LittleRed1
It'd be fine except for the tax bit. If this is so valuable, why doesn't the CC go around and ask member businesses to assess a half cent 'tax' (fee) to support the project, and they can run it?
If they won't, doesn't that suggest maybe it's not that valuable?
My experience mirrors your, WRT Texas local governance. Ping me if you need a sympathetic ear.
There exists an industry of highly-paid "Consultants" who advise about such issues and are never accountable for bad forecasts. They also seem to be paid by interests other than the local decision-making board. When somebody is pushing a change to beer-wine wet/dry laws, or building a new stadium or convention center, or a big change to zoning and development plans -- the consultants are ready with pretty pictures. If a decade later the picture does not develop, the consultants are STILL there, and STILL have other pretty pictures.
JMelcher: ping! ping! ping! You can email me at texanninetynine@earthlink.net, and I'll send you better contact info that way. Your comment reminds me of the Demotivation poster: "Consultants: if you're not part of the solution, there's a lot of money to be made in prolonging the problem."
Douglas: They're actually almost doing this. They are planning to come to the local governments hat in hand every year for a minority of their budget, but they expect most of their funding to be private. This was exactly the argument I made when there was a push to establish a tax-funded Groundwater Commission that few voters wanted. They argued they needed the taxes to do the studies that showed the need. We argued that anyone who thought there was a need should pass the hat and fund a study establishing the problem, then we'd think about a tax to fund a solution. Their proposal went down 8-to-1. That squabble was also similar to this one in the use of the "but all the best cities have one of these" argument.
LittleRed: thank you so much.
Things are so much saner there than here in California.
Like I needed to say that, though. Low bar.
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