Fiscal Impact Analysis Creates a Win-Win for Projects and Communities (cont.)

In addition to fiscal impact analysis, Carroll Tomorrow uses other technological tools to enhance its capabilities. Here, the author uses GIS and an interactive whiteboard to show state project managers the characteristics of specific sites.

The amount of data required for fiscal impact analysis and the complexity of the analysis are the most-cited reasons why economic developers don’t incorporate it into their protocol for projects – or if they do, why they don’t conduct the analysis in-house. However, in-house analysis is necessary to improve negotiations for incentives. Fortunately, computer programs for fiscal impact analysis have been developed that are user-friendly and don’t require the user to have a degree in economics to conduct analyses for most projects.

Fiscal impact models such as LOCI (developed by the Georgia Institute of Technology) or the Federal Reserve Fiscal Impact Tool can be used on a regular desktop computer by a person who has received basic training. Even these models require a significant amount of data, but as shown in the experience of Carroll Tomorrow, the data collection process also can have benefits to the economic development organization.

The Carroll Tomorrow experience

The Carroll County Economic Development Foundation, d.b.a. Carroll Tomorrow, is a nonprofit community and economic development organization serving Carroll County, Georgia, and its municipalities of Bowdon, Bremen, Carrollton,Mt. Zion, Roopville, Temple,Whitesburg and Villa Rica. Carroll Tomorrow was formed in 2001 by local leaders concerned about rapid population growth approaching from Atlanta, recent layoffs in traditional industries and troubling social and educational statistics.

The organization’s initial three-person team consisted of a veteran economic development professional with a reputation for innovation and effective use of technology; an experienced manager with a strong history of community leadership; and a recent graduate in development studies from the London School of Economics. The Board of Directors made a commitment to provide staff with the tools necessary to fulfill their mandate – to change the way economic development was done in Carroll County, as outlined in an economic development strategy developed by more than 300 community volunteers.

Considering the staff and board of Carroll Tomorrow, it’s not surprising that one of the first practices implemented was the use of fiscal impact analysis.When choosing the tool, staff examined several options. Georgia Tech’s LOCI program was chosen because it includes both benefits and costs in the analysis, includes the impacts of households created by the project, features an easy-to-use interface, produces reports discernable by decision-makers, and carries an affordable price tag.

As with most fiscal impact models, LOCI requires a significant amount of data on the community and the local governments of interest. However, the time spent collecting and inputting the data up front then allows for quick turnaround when it’s time to evaluate a project and negotiate.

In addition, the data collection process provides an opportunity to educate local government staff, elected officials and the community on the organization’s use of fiscal impact analysis in the economic development process.While collecting the data, Carroll Tomorrow also spoke at local government public meetings about the practice. The knowledge that economic development projects were being evaluated with the well being of local governments and taxpayers in mind – and combined with recapture agreements – helped plant the seeds of trust and credibility with the community.

Since its inception, Carroll Tomorrow has used fiscal impact analyses to help shape the deals for every project with which it is involved. The community and local governments have come to expect the results of fiscal impact analyses to be included when projects and incentive packages are debated by elected bodies and authorities. LOCI results are presented in a way that companies understand, providing them with assurance that local governments can fulfill their commitments while continuing to be a high-quality place where employees want to live. The recruitment and negotiation of the DecoStar fascia manufacturing facility illustrates these dynamics well.

« Page 1 | Page 3 »