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Interactive Policymaking: Incentives

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Interactive Policymaking: Incentives

Interactive Policymaking: Incentives

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  • 1. Interactive Policymaking: Incentives The step-by-step experience of a small North Carolina County
  • 2. 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
  • 3. 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 process 3. Identify outside experts who can assist/advise 4. 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 InteractiveMethod
  • 4. 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 InteractiveMethod
  • 5. 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 organizations 12. Draft incentive policy and any related documents 13. Submit to county attorney and other local officials for review 14. Submit to local governing body for adoption. InteractiveMethod
  • 6. Warren County Case Study IntroductiontoWarrenCounty
  • 7. Warren County: Location and Population Source: Warren County, NCOneMap 19,400 19,600 19,800 20,000 20,200 20,400 20,600 20,800 21,000 21,200 0 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 2000 2010 2012 WarrenCo.Population NCPopulation NC Warren County Source: 2000 and 2010 Decennial Census and 2012 Population Estimates IntroductiontoWarrenCounty
  • 8. Socioeconomic indicators $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 0% 10% 20% 30% 40% 50% 60% 70% Poverty Rate Child Poverty Rate % in Civilian Labor Force % with More than HS Degree (25 and up) Median Household Income (2012 inflation adjusted dollars) Dollars Percent Warren County North Carolina Source: 2010-2012 ACS 3-Year Estimates IntroductiontoWarrenCounty
  • 9. Demographic composition 0 5 10 15 20 25 30 35 40 45 50 0% 10% 20% 30% 40% 50% 60% 70% African American* Native American* White* Hispanic 2 or More Races Median Age Years Warren County North Carolina Source: 2010-2012 ACS 3-Year Estimates* One race only IntroductiontoWarrenCounty
  • 10. Unemployment 11.0 13.3 0 2 4 6 8 10 12 14 UnemploymentRate NC Annual Unemployment (Dec.) Warren County Annual Unemployment (Dec.) Source: Bureau of Labor Statistics, LAUS, 2000-2013 IntroductiontoWarrenCounty
  • 11. 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% 7.1% 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 IntroductiontoWarrenCounty
  • 12. 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 WarrenCountyCaseStudy
  • 13. 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 WarrenCountyCaseStudy
  • 14. 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) WarrenCountyCaseStudy
  • 15. 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 WarrenCountyCaseStudy
  • 16. 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 WarrenCountyCaseStudy
  • 17. 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 WarrenCountyCaseStudy
  • 18. 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. WarrenCountyCaseStudy
  • 19. 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 WarrenCountyCaseStudy
  • 20. Warren County case study: crafting the policy • Draft model agreement [link to agreement] • [Anything else from agreement in slide?] WarrenCountyCaseStudy
  • 21. 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 WarrenCountyCaseStudy
  • 22. 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 WarrenCountyCaseStudy
  • 23. Warren County case study: adoption! • County commissioners approve policy WarrenCountyCaseStudy
  • 24. 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 Conclusions
  • 25. 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 Conclusions
  • 26. Contacts? Further info? • Website? • Other resources?