Covering Government Incentives for Economic Development by John Cheves


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John Cheves, investigative reporter at the Lexington Herald-Leader, presents during the Reynolds Center's free workshop, "Investigating the Business of Government," in Lexington, Ky.

For more information on business coverage training for journalists, please visit

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Covering Government Incentives for Economic Development by John Cheves

  1. 1. Covering Government Incentives for Economic Development John Cheves Lexington (Ky.) Herald-Leader
  2. 2. Economic Development REP. MIKE SUMMERS, standing at Roseanne’s door: That’s why bringing in new business is my number one priority. ROSEANNE: How? REP. MIKE SUMMERS: Through tax incentives. See, we’re going to make it cheaper for out-ofstate businesses to set up shop right here in Lanford. ROSEANNE: So they get a tax break? REP. MIKE SUMMERS: Yeah, that’s why they come here. ROSEANNE: Well, who’s going to pay the taxes that they ain’t paying?
  3. 3. Economic Development REP. MIKE SUMMERS: Well … you will. But you’ll be working. Good, steady employment. ROSEANNE: Union wages? REP. MIKE SUMMERS: Well, now, part of the reason these companies are finding it so expensive to operate in other locations— ROSEANNE: So, they’re going to dump the unions, so they can come here and hire us at scab wages. And then, for that privilege, we get to pay their taxes. REP. MIKE SUMMERS: Um. Is your husband home?
  4. 4. Economic Development •  Who is responsible for it at the local, regional and state level? •  When and where do they meet or publicly report their actions? •  Understand these agencies – their budgets, how their boards are chosen, their powers, their strategies, how they are funded and by whom, and who oversees them. Photo by flickr user MDGovpics
  5. 5. Economic Development What are we giving? •  Tax breaks; tax refunds; grants or loans; worker training; land, buildings and roads Photo by flick user Matt Seppings
  6. 6. Economic Development What are we giving? •  Use the Open Records Act to get full terms of the deal (you may face exemptions on pending land sales and other specifics) Photo by flickr user USDAgov
  7. 7. Economic Development What are we getting? •  Do they get incentives regardless, or are conditions attached, such as a number of jobs to be created at agreed-on wages? •  Does anyone check to make certain we got what was promised? Does anyone check five years later to see if it’s still there?
  8. 8. Economic Development Does it add up? •  Check jobs claims by calling employers to ask how many jobs exist and what role, if any, incentives played. How much did we pay per job? •  Use economic data to track the big picture. Did your small town add 100 jobs while gradually losing 200 jobs? What kind of jobs? Is local income rising or falling over time?
  9. 9. Economic Development “If you build it, he will come.” Building industrial parks, factories and retail spaces “on spec” Photo by flickr user Rob Young
  10. 10. Economic Development Follow the money Who gets the incentives? •  If land is purchased, from whom? (And check the deeds for shady deals.) •  If something is built or paved, by whom? •  Consultants and attorneys? •  Relationships between recipients and public officials or economic development agencies?
  11. 11. Economic Development What’s the plan? •  Luring distant factories? Aiding small businesses? •  Creating a new local industry, like tourism? •  Is it realistic, given the education of the labor pool, access to major transportation systems, quality of life and – frankly – common sense? •  Can anyone show you specific goals and results? Get out and look and talk.
  12. 12. Economic Development Experts to guide you through the spin: -  U.S. Census Bureau -  U.S. Bureau of Labor Statistics -  U.S. Bureau of Economic Analysis, Federal Reserve Bank studies
  13. 13. Economic Development Experts (continued): -  Economists at State U., retired public officials, nonprofit economic development agencies, authors of published economic studies of your community or state -  Local residents and local leaders who can say from experience what has worked for their community and what has not