Local Economic Development Incentives in the US
1. Description of the Issue
Local economic development incentives constitute essential aspects of urban development economic policies. Such incentives are meant to enhance the development of cities that are considered underdeveloped. The enticements assume different forms. However, the common ones are the policies for providing tax incentives together with improvement of infrastructure (Anderson and Wassmer ‘Bidding for Business 82). Government provides enticements for financial development in different ranks starting from home and state echelons to countrywide ranks. Fundamentally, economic incentives refer to the cash and or near-cash aid that is provided by local, state, and/or national government to boost or attract various businesses to operate within a given jurisdiction (Greenbaum 75). The key goal of offering local financial enticements is to foster progress within certain targeted areas. In return, this strategy helps in employment creation in the underdeveloped cities while also encouraging infrastructural growth to take place in stagnant cities. In the long-term, the plan also generates revenues to states and local governments. Amid these benefits, the issue of whether local economic incentives, which are aimed at fostering urban development in the US, qualify as a cost-effective mechanism of inducing economic growth in the underdeveloped urban areas is relevant to public policy developers.
2. Importance of the Issue
The effectiveness of local economic development is an important issue facing many metropolitan areas in the US. For instance, ensuring distribution of various businesses within all metropolitan areas and/or retaining economic activities without negating the...
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Local economic development incentives enhance the development in urban areas that have high rates of unemployment. This goal is achieved by using the incentives to attract and retain business in the effort to boost employment levels. The general concession is that increment of employment reduces poverty levels, hence raising the overall wellbeing of communities. This justifies funding local economic development incentives in the US using local government revenues generated from communities. A prevalent issue surrounding investments of local government revenues in local economic development incentives is whether they are the most cost effective mechanisms of inducing the development of metropolitan. In a bid to offer a response to this query, cost benefit analysis for the investments of local government revenue in local economic development incentives is important.
“Could suburbs prosper independently of central cities? Probably. But would they prosper even more if they were a part of a better-integrated metropolis? The answer is almost certainly yes.” (p. 66)
It seems obvious that all of the prior examples bring economic growth and development to that certain place. However, there is a less obvious question to be asked. If a new bridge is built what can that bring to an area? In the case of Buffalo, many people believe economic revival.
this paper has also discussed Best Policy Initiatives to increase economic growth in Texas and
Now, a normal sized town contains fast-food joints, supermarkets, malls, and superstores, but a small town lacks that appeal. The small-town could be the most beautiful landscape known to man, but lack the necessary luxuries in life that a typical American would benefit from. Carr and Kefalas make this statement that emphasizes the town’s lack of appeal, “Indeed the most conspicuous aspects of the towns landscape may be the very things that are missing; malls, subdivisions, traffic and young people” (26). The authors clearly state that they realize that towns, such as the Heartland, are hurting because of the towns’ lack of modernization. For all intents and purposes, the town’s lack of being visually pleasing is driving away probable citizens, not only the native youth, and possible future employee’s away from a possible internship with the town. The citizens with a practice or business hurt from the towns inability to grow up and change along with the rest of the world, yet the town doesn’t realize what bringing in other businesses could potentially do for their small town. Creating more businesses such as malls, superstores and supermarkets would not only drive business up the roof, but it’ll also bring in revenue and draw the
Suburbs: Protected Markets and Enclave Business Development.” Journal of the American Planning Association Winter 1999: 50-61.
A BID is defined as, “[a]n organization of property owners in a commercial district who tax themselves to raise money for neighborhood improvements” (Cullingworth, 387). Assessments are then made mandatory and collected by the city. Thus, funding does not come by way of the federal government, but city’s can utilize grants to help fund their efforts. In this way, the federal governments support the community economic development, but takes no direct efforts in funding the programs. The city’s then offer incentives, in the form of tax exemptions, to attract developers. In turn, new construction would create jobs and lower unemployment. Theoretically, the encouragement of a tax incentives is to stimulate the economic growth of an area with higher unemployment rates. The problem is many developers tend to gravitate towards the city’s that can offer greater incentive. Officials have wondered if these programs benefit the cities with the greatest
...t severely reduced the amount of property taxes collected and thus diminished funding for California's education system. Although, voters intended to reduce state government interference in local governance, the proposition had the opposite effect. The shortfall in tax revenue made it necessary for the State to provide aid to local governments to keep public safety, welfare programs, and education programs running. Property tax revenue at the county level decreased from thirty-three percent to only twelve percent after the implementation of Proposition 13.(Chapman 1998) The allotment of aid means that the state has greater control over how money is allocated and spent, while cities were able to transfer lost revenue onto residents through service fees, counties had to turn to state and federal funding to provide for public safety and public assistance programs.
Jelier, Richard W. and Sands, Gary. Sustaining Michigan : metropolitan policies and strategies. East Lansing: Michigan State University Press, 2009. Book.
cents” (Morris 23). According to this information, urban sprawl is costing tax payers in areas of
...any other city that was built off of the auto industry and to see if the “zones of transition” shift to areas in which new employment opportunities arise after the major employer was lost.
In California, the finance structure of local government gives them more incentives to approve commercial (non-residential) housing development. Cities and counties find fiscal benefits come primarily from the commercial development, such as hotels, restaurants, and retail establishments. The tax revenue received from these establishments could often offset the cost for a local government to provide public services. On the contrary, the affordable housing developments cause more local costs than yielding high tax revenues. Therefore, local governments have the motivation to develop commercial establishments by zoning considerable lands for such purposes. Consequently, many cities and counties have approved their land use planning disproportionately towards commercial
This state is full of more cities besides just Los Angeles and San Francisco, for example, my city Richmond, California. I wasn’t born there, but I have lived there most of my life, and there is a certain appeal is there, but its not the stereotypical beauty you see in any infomercial. This city isn’t celebrated nor is it world recognized for its accomplishments, but it is a small city with hidden treasure. The hidden treasure are the success stories that the community does not expect, and that can create a sense of empowerment for everyone around us. That empowerment is something that should be seen nationally, especially since Richmond is not the only impoverished city in
John Buntin notes that the arrival of high-income persons will definitely attract services such as schools, better jobs for residents, better roads and electricity among other services (Gentrification Is a Myth). Therefore, gentrification appeals to individuals who are able to put pressure on local authorities by power of their economic status. As a result, the standards of living of developing cities rise alongside the cost of living in those same cities.
to a metropolitan city. It has become a deciding factor in determining the worth of
Most Americans live in the 324 metropolitan areas of the United States. Even for the 50% of the population who live in the suburbs, problems of the central cities are increasingly common, and some pockets of urban decay have moved outward (Leviton, L. C., Snell, E., & McGinnis, M., 2000 p. 363).