Laserfiche WebLink
Strategy 1.3: Ensure that the City has appropriate tools to finance and <br />incentivize quality economic development. <br />Tactic 1.3.1: Adopt incentive policy guidelines that are competitive with other regions while <br />protecting the tax base. <br />Before offering a prospect an incentive package, La Porte should conduct a cost-benefit <br />analysis to determine the potential value of the project to the community. As part of this <br />process, La Porte should be able to answer a number of general questions about each <br />project: <br /> Would this project happen absent the provision of incentives? <br /> What is the opportunity cost of the incentive (in other words, what alternative uses of <br />these resources are foregone by supporting this project)? <br /> How much economic activity will occur because of the project? <br /> What is the total present value of the incentive package? <br /> How much will it cost the city to adequately service (e.g., utilities, public safety, etc.) <br />the project during its construction and operational phases? <br /> What will be the environmental impact? <br /> What return can government expect in terms of tax revenues from the project? <br />Beyond the questions outlined above, La Porte should consider adopting the following policy <br />guidelines. <br />Policy Guideline #1: <br />Benefits should exceed costs, even after incentives are granted. Except in <br />extraordinary situations, the public sector should not be willing to “go upside down,” <br />meaning that tax revenues must exceed public sector costs. <br />This may appear obvious, but many communities do not accomplish this goal because <br />they do not correctly measure the costs and benefits. For other communities, the <br />challenge is to balance immediate jobs creation with long-term tax revenue required to <br />provide city services. La Porte is in a unique position because of its large industrial <br />districts and high percentage of workers who commute to the area for work. For La <br />Porte, what counts as success is linked more closely with quality of life projects rather <br />than strictly job creation. This translates into La Porte being more selective about <br />which projects to incentivize. <br />The success measures for La Porte should focus on: <br />1. Total tax revenue generated, with emphasis on sales tax revenue <br />2. Industry sector diversification (retail trade or business/professional service <br />firms) <br />3. Geographic location within La Porte <br />22 <br />Forward La Porte Economic Development Strategic Plan I 2009-2013 <br /> <br />