Interactive Policymaking: Incentives

Interactive Policymaking: IncentivesThe step-by-step experience of a small North Carolina County

Outline

• An interactive method to develop an incentive policy• Warren County example• Introduction to the county: why incentive policy needed• Introduction to the county: demographic and

socioeconomic background• Step by step case study of incentive policy implementation

in Warren County• Conclusions

An interactive method to develop an incentive policy

1. Engage stakeholders (businesses, residents, nonprofit, etc.) to better understand economic development expectations, goals, capacity and hurdles

2. Identify local partners that should be part of process3. Identify outside experts who can assist/advise4. Use research, interviews, and other methods to analyze the

local economy and establish economic development priorities

5. Gather information on local incentives in region/state

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6. Define role of incentive policy• Public statement of economic development goals?• Internal guideline?

7. Identify how incentive policy can support local economic development goals

8. Determine how incentive applicants will be assessed• What are criteria used?• Number of jobs and amount of capital investment are traditional

metric but these only the beginning

9. Determine how incentive award amounts will be decided

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10. Identify how businesses that receive incentives will show compliance with incentive agreement

11. Formalize agreements with any partner organizations12. Draft incentive policy and any related documents13. Submit to county attorney and other local officials for review14. Submit to local governing body for adoption.

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Warren County Case Study

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Warren County: Location and Population

Source: Warren County, NCOneMap

2000 2010 20120

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

19,400

19,600

19,800

20,000

20,200

20,400

20,600

20,800

21,000

21,200

NC

Warren County

NC

Popu

latio

n

War

ren

Co. P

opul

ation

Source: 2000 and 2010 Decennial Census and 2012 Population Estimates In

trod

uctio

n to

War

ren

Coun

ty

Socioeconomic indicators

Poverty Rate Child Poverty Rate

% in Civilian Labor Force

% with More than HS De-gree (25 and

up)

Median Household

Income (2012 infla-

tion adjusted dollars)

0%

10%

20%

30%

40%

50%

60%

70%

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

Warren County

North Carolina

Perc

ent

Dolla

rs

Source: 2010-2012 ACS 3-Year Estimates

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Demographic composition

African American*

Native American*

White* Hispanic 2 or More Races

Median Age0%

10%

20%

30%

40%

50%

60%

70%

0

5

10

15

20

25

30

35

40

45

50

Warren County

North Carolina

Year

s

Source: 2010-2012 ACS 3-Year Estimates* One race only

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Unemployment

20002001

20022003

20042005

20062007

20082009

20102011

20122013

0

2

4

6

8

10

12

14

11

13.3

NC Annual Unemployment (Dec.)

Warren County Annual Unemployment (Dec.)

Unem

ploy

men

t Rat

e

Source: Bureau of Labor Statistics, LAUS, 2000-2013

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to W

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unty

Labor force by sector

30.7%

19.2%

13.0%

10.9%

9.5%

6.2%

3.5%3.1% 1.9%1.7% 0.4%

Federal, state & local govt.

Manufacturing

Trade, transportation & utilities

Education & health services

Leisure & hospitality

Natural resources & mining

Profesional & business services

Construction

Financial activities

Other services

Information

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Why an incentive policy in Warren County?

• County lacked formal policy• No use of incentives in recent years• Decline of traditional industries • New leadership on the economic development commission

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Warren County case study: laying the groundwork

• ED Director conducts numerous community meetings in Warren County around local food and other local economic development issues

• At the same time, county commissioners discuss need for incentive policy

• ED Director starts to consult with outside experts• County pursues ways to develop economic capacity through

local foods movement, using “community R&D”• Establishes partnership with Warren County SPARC (Sustained

Participatory Action Research Collaboration)—a joint participatory research project between UNC-Chapel Hill and the county

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Kenan-Flagler Business School

- unpact into at least 2 slides- describe purpose/importance of each initiative (e.g. DCRP) in 1-2 bullets w/o talking about the specific class- follow with 1-2 bullets that identify UNC, DCRP, etc.- counties should clearly understand that they could try this process on their own or in partnership with another entity


• Outside experts, cont.• EDC and ED Director seek more sophisticated understanding of

local economy and relationship of incentives to economic development goals• Partners with graduate student workshop to research ways to

support strong existing industries and attract new industries in value chain

• Workshop provides memo on incentive best practices and state trends in incentive granting

• Workshop led by Professor Nichola Lowe in UNC Department of City and Regional Planning (DCRP)

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• Outside experts, cont.• EDC gathers more information about incentives in NC

• With Kenan Institute assistance, meetings convened with other economic developers and experts from around the state

• Provide opportunity for sharing information, practical experience, innovative practices

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• ED Director begins to identify format and general goals of incentive policy, including:• Create more jobs and provide better wages/benefits for residents• Preserve quiet, small town character• Sustain and grow existing businesses• Reflect county’s “homegrown” orientation• Recognize county’s economic strengths (agriculture,

timber/forestry, textiles) and unique attributes• Attract and retain targeted industries that “fit” county’s economy,

scale, workforce• Encourage environmental sensitivity

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Warren County case study: crafting the policy

• Kenan Institute and ED Director work closely to:• Determine priorities among economic development goals

• ED Director leads the “Penny exercise” with EDC board.• Each board member allocates 100 pennies among incentive policy

priorities to determine weight given to each• These priorities in turn become criteria for assessing projects

requesting incentives

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• Kenan and ED Director define incentive criteria - the behaviors or decisions county wants to encourage• Decide on a point system—companies are awarded points for

meeting certain criteria. Companies with a larger number of points are eligible for larger incentive award

• Identify number of points awarded for each criterion• 12 criteria, including number of jobs created, level of wages and

benefits, amount of capital investment, environmental impact, industry type, in-county purchases and sales.

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• Kenan Institute and ED Director compose draft documents• Documents modified based on feedback from EDC board• Documents include • Draft incentive policy [link to policy?]• Incentive standards and guidelines

• Defines terms and benchmarks• Outlines how company demonstrates it has met agreement terms• Describes when incentive disbursed

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• Draft model agreement [link to agreement]• [Anything else from agreement in slide?]

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• ED Director and local Workforce Development Board establish terms of partnership• Companies that pledge to consider residents when hiring receive

points when calculating incentive award (local hiring is one of 12 criteria)

• Those companies enter into an agreement with WDB• WDB and company will define hiring goals, training needs• Company provides WDB with job announcement and required

skill sets• WDB conducts job search and forwards qualified applicants to

company

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Warren County case study: finish line in sight

• ED Director obtains approval of draft policy from other county officials• County attorney runs draft policy, guidelines and agreement by

experts at UNC School of Government• ED Director formally introduces policy to county

commissioners• Presentation at commissioners’ work session allows for questions

and discussion

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Warren County case study: adoption!

• County commissioners approve policy

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Conclusions

• Process is reiterative:• Consult• Apply learning • Consult again

• Process is big picture to granular:• Start with broad, general ideas• Use resources, community, partners, EDC board, etc. to hone

ideas• Reassess and hone some more until all details ironed out

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Conclusions

• Process takes time• Involvement of partners and external resources produces

better policy• More feedback• More sources of inspiration• Access to range of skills, perspectives

• Support of EDC board and local officials is key• Get everyone on the same wavelength early• Support may require explanation/education

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Contacts? Further info?• Website?• Other resources?

Interactive Policymaking: Incentives

Education

Transcript of Interactive Policymaking: Incentives