Posted on July 10, 2012 9:15 AM
New Report on Economic Development Incentives
The Lincoln Institute of Land Policy recently released Rethinking Property Tax Incentives for Business, a report that analyzes the effectiveness of economic development incentives such as property tax abatements and tax increment financing (TIF). The report outlines several findings, including that the proliferation of property tax abatements has reduced their effect on economic growth.
The report recommends that policymakers consider alternatives to tax incentives, such as providing job training or business support services or to implement broad tax bases with lower tax rates. It also recommends that, when providing property tax incentives, states should both make the process more transparent and analyze its effectiveness. The report’s recommendations to local governments focus on creating eligibility criteria for incentives and encouraging more cooperation among local governments in efforts to promote economic development.
Many of the report’s recommendations align well with GO TO 2040’s recommendations on governmental transparency and regional cooperation. CMAP is currently conducting its own study on economic development incentives, with a focus on property tax abatements and TIF, as well as sales tax rebates.