While you can still find people who think that “economic development” means throwing tax breaks and”incentives” at every Fortune 500 that lifts it’s skirt, some municipalities are starting to put the corporate welfare system under greater scrutiny.
From USA Today:
Business incentives lose luster for states – Some question value to local economies
By Dennis Cauchon
Generous tax breaks given to companies that threaten to take their business elsewhere are coming under increasing scrutiny from state and local officials who say taxpayers aren’t getting their money’s worth.
Critics say the tax breaks and other financial incentives have gotten out of hand, costing taxpayers billions of dollars and doing little for the economy.
“There’s an entitlement mentality about tax breaks today,” Kansas City, Mo., Mayor Mark Funkhouser says. “Every developer thinks it’s his right not to pay property taxes.” Funkhouser was elected mayor in May after campaigning against tax breaks to developers, including one for a luxury condo development in an affluent part of his city.
Instead of prostituting our state to the likes of BoA and Walgreens (yuck!) how about building an infrastructure that supports entrepreneurs and small businesses?
A good start would be looking at some state based entrepreneurship “Best Practices” like…
1) Integrate Entrepreneurship into State Economic Development Efforts by making entrepreneurship part of the explicit mission of the state’s economic development efforts
2) Use the public education system to nurture and encourage future entrepreneurs
3) Incubate Entrepreneurial Companies by increasing access to venture capital and through Physical Incubators
4) “Get Out of the Way” through Regulatory Reform and Streamlining by putting regulatory and licensing processes on-line and allowing instant online licensing.
This is not expensive stuff, and it is not earth-shaking revolutionary stuff. It is basic and we are already losing ground to states where “economic development” is being done right.