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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An interactive method to develop an incentive policy
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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An interactive method to develop an incentive policy
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
Intr
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to W
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unty
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
Intr
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to W
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unty
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
Intr
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to W
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unty
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
Intr
oduc
tion
to W
arre
n Co
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
Intr
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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
War
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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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Warren County case study: laying the groundwork
• 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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Warren County case study: laying the groundwork
• 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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Warren County case study: laying the groundwork
• 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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Warren County case study: crafting the policy
• 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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Warren County case study: crafting the policy
• 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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Warren County case study: crafting the policy
• Draft model agreement [link to agreement]• [Anything else from agreement in slide?]
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Warren County case study: crafting the policy
• 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
Conc
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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
Conc
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Contacts? Further info?• Website?• Other resources?
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