08-23-04 La Porte Development Corporation Minutes

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Texas Economic Development IJlcentives 2003 Page 4 of 29 the database of information currently collected on these local economic development corporations was too limited to address this issue. In July 2002, the Comptroller's office contracted with MGT to develop case studies of four economic development corporations. [6] The case studies focus on the use of financial incentives funded with economic development sales tax revenues. MGT was asked to deduce from this limited sample, best practices and policy options that may (1) help policymakers assess the impact of these corporations in the future, and (2) help these corporations maximize effectiveness in promoting economic development. MGT worked with the Texas Economic Development Council, a statewide professional organization of nearly 900 economic development practitioners, to identify four communities that represent a diverse sample in terms of population, geography and economic development sales tax revenues. Two of the selected economic development corporations (Abilene and Taylor) collect the ~4A sales tax, while the two others (New Braunfels and Victoria) collect the ~4B tax. Revenues raised by the ~4A tax may be used to fund projects specifically related to manufacturing and industrial development. The ~4B tax, authorized in 1991, may be spent on infrastructure and quality of life improvements, as well as traditional economic development. Figure 3-1 illustrates the population breakdown of cities that impose either the ~4A or ~4B tax. Figure 3-1: What Size Cities Levy the ~4A and ~4B Economic Development Sales Tax? 50,000 fa gun Papulatian 10,000104',999 3% Populalion 20% --_~~_:_~_---------.." .' 100,000 PapalallDn Dr Mar. 2% Under 1.000 Po p u lalian 12% 5.000 la g,ggg Papulalia n 16% - ~---- l,DDD 10 4,999 --._.._ Populalian --...- 47'Y. Source: Comptroller of Public Accounts The case studies are intended to provide the Comptroller's office with an understanding of the activities undertaken by the corporations, with an emphasis on their results , and an analysis of their practices. The case studies are not intended to assess whether ~4A or ~4B tax revenues have been spent appropriately or to evaluate the operations of the individual corporations. Given the limited scope of this research, it is important to note that general conclusions about the effectiveness of the economic development sales tax based on four case studies is not possible; however, these case studies do provide an example of common practices. Best Practices All of the economic developers interviewed were interested to learn about "best practices" http://www.window.state.tx.us/specialrptlecodev03/06ch3 .html 9/27/2004