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Business Incentives and North Carolina’s Tier 1 Counties: Have They Worked?

Business Incentives and North Carolina’s Tier 1 Counties: Have They Worked?. Presentation to the NC Joint Select Committee on Economic Development Incentives December 16, 2008 By Frank DiSilvestro and Bill Schweke, CFED. GOALS OF PRESENTATION.

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Business Incentives and North Carolina’s Tier 1 Counties: Have They Worked?

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  1. Business Incentives and North Carolina’s Tier 1 Counties: Have They Worked? Presentation to the NC Joint Select Committee on Economic Development Incentives December 16, 2008 By Frank DiSilvestro and Bill Schweke, CFED

  2. GOALS OF PRESENTATION Review three key incentive programs in NC– are they benefiting Tier 1 counties? Discuss alternative approaches toward helping Tier 1 counties. • A “homegrown” approach focusing on business climate • Alternative subsidies given economic downturn Corporation for Enterprise Development

  3. TIER 1 COUNTIES and INCENTIVES What is a Tier 1 County? • Unemployment rate • Median Household Income • Population growth • Property value per-capita Recent changes in Tier designations Relationship to Incentives programs Corporation for Enterprise Development

  4. PRIMARY INCENTIVE PROGRAMS Bill Lee Credits (replaced by Article 3J in 2007) Job Development Investment Grant Program (JDIG) One NC Fund Corporation for Enterprise Development

  5. Source: NC Department of Revenue Corporation for Enterprise Development

  6. Source: NC Department of Revenue Corporation for Enterprise Development

  7. Source: NC Department of Commerce Corporation for Enterprise Development

  8. Source: NC Department of Commerce Corporation for Enterprise Development

  9. Corporation for Enterprise Development

  10. PROPOSAL Encourage wider efforts to build community capacity through education, research, tool development, benchmarking, leadership and organizational development, partnerships, use of new technologies, and creating learning communities. Corporation for Enterprise Development

  11. PROPOSAL 1. Intelligent leadership and strong community capacity are prerequisites for effective economic development. Economic development is more than the “art of the deal,” it is the “art of collaborative problem solving.” Corporation for Enterprise Development

  12. PROPOSAL 2. Community capacity includes local organizational and leadership skills, the sense of common purpose, and the ability to monitor performance. It is as important a community asset as labor force skills, natural resources, infrastructure, financial capital, or entrepreneurial initiative. Corporation for Enterprise Development

  13. PROPOSAL 3. Successful communities must have breadth of involvement, depth of local skills, and heightened relationships to external resources. Corporation for Enterprise Development

  14. EXAMPLES in NORTH CAROLINA Golden Leaf Foundation Community Assistance Initiative North Carolina Business Resource Alliance Corporation for Enterprise Development

  15. COUNTER-RECESSIONARY SUBSIDIES Job Growth Tax Credit Targeted Job Creation Grant Program Corporation for Enterprise Development

  16. CONCLUSIONS Current Incentives programs are not serving those parts of the state that need the most help Changing Tier designations masks the problem JDIG approach, while helpful, can still disadvantage distressed areas A new approach is needed… Corporation for Enterprise Development

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