The Latest in Economic Development

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This week’s blog discusses a training program for high school students spearheaded by Mercedes-Benz, encouraging news for metropolitan exports, the difficulties in redeveloping small city blight, and a survey of recent economic development incentive articles.

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Regardless of where you fall in the “skills mismatch debate,” it can’t hurt if younger generations are learning the finer points of advanced manufacturing. Mercedes-Benz is doing its part to make that happen. Realizing that they will need a steady stream of work-ready graduates, Mercedes is partnering with the Tuscaloosa City School System in Alabama to offer weekend classes for students interested in potential employment with the auto company. When enrolled in the Workforce Development Academy, students will participate in “applied mathematics, measurements, team building, team projects and field trips to the (Mercedes) plant. They’ll also participate in hands-on projects and learn about robotics.” Building a (free) bridge to future employments seems like a good deal to me.

Metropolitan exports increased nearly 40 percent since 2009 to total $1.31 trillion in 2011” says a blog post from the International Trade Administration. Here’s some good news: 13 smaller metro areas, including Asheville, NC and Yakima, WA, surpassed the $1 billion threshold in exports for the first time in 2011. Also, Detroit exported $49.4 billion in 2011 – the first time reaching this level since before the recession. ITA notes that “communities and metropolitan areas can leverage exports as an economic development tool.” NLC agrees.

To create a community redevelopment agency or not? That is the question being asked by some small cities in Florida in response to blighted districts.  For the city of Deltona, creating a CRA would allow a portion of property tax revenues to be allocated to “everything from landscaping and new utility lines to small-business loans in neighborhoods deemed blighted.” DeBary and Orange City are also exploring creating development districts. While city officials deem CRAs necessary for attracting jobs, they may be fighting an uphill battle. Since the CRAs would divert tax revenue from county to city coffers, poor revenues and strained budgets are causing the county do be more careful in doling out cash.

The economic development incentive debate is in full swing. Here are some recent highlights:

Samsung has indicated that it could “double its $13 billion investment (in Austin) over the next five years.”  But it depends on the Texas legislature. The issue at hand is a tax break that “allows steep discounts on school property taxes for qualified companies.” It could be the deciding factor in the company’s choice to expand in Texas or Korea.

Joe Taylor, the CEO of Panasonic, said that the company would have left New Jersey if not for tax incentives. Taylor stated that even with the incentives the company received, “it wasn’t the best move from a financial standpoint.” Good Jobs First called the New Jersey incentives a “very costly corporate tax giveaway.”

Steven Lanza of the University of Connecticut says that it would be better if all states discontinued aggressive incentives for economic development.  But because every state takes part in the zero-sum game, Connecticut has to play its part or risk “being taken to the cleaners.”

Policing incentives has moved to the forefront in Florida after a highly publicized deal with a James Cameron-backed animation company went bust.  Apparently, less than half of the jobs promised by companies receiving incentives from the Dept. of Economic Opportunity were actually created over the last 16 years.