An Economic Development Corporation (EDC) is established through a public vote to use tax revenue to expand a community's economy. The Amarillo EDC was established in 1990 when voters approved a half-cent sales tax to fund economic development. The EDC is governed by a city-appointed board and uses the sales tax funds to attract primary businesses that export goods/services outside the community to bring in new money and support local jobs and vendors through economic ripple effects.

1. FREQUENTLY ASKED QUESTIONS

2. Q: WHAT IS AN ECONOMIC DEVELOPMENT
CORPORATION (EDC)?

3. Q: WHAT IS AN ECONOMIC DEVELOPMENT
CORPORATION (EDC)?
A: Texas state law authorizes communities to set an economic
development sales tax rate and to establish an EDC to spend that tax
revenue to expand and grow a community. EDCs are established through a
public vote.

4. Q: HOW IS AN EDC FORMED?

5. A: EDCs are voted on by community residents. In Amarillo, the EDC is city-
chartered and governed by a city-appointed board of directors who
oversees decisions regarding the EDC’s use of funds and projects. The
board of directors is not paid, but it can be reimbursed for expenses. The
city council has the final say for the EDC’s programs, investments
and expenditures.
Q: HOW IS AN EDC FORMED?

6. Q: WHEN WAS THE AMARILLO EDC ESTABLISHED?

7. Q: WHEN WAS THE AMARILLO EDC ESTABLISHED?
A: In 1990, Amarillo approved the formation of an EDC, becoming the
second Texas city to do so after lawmakers passed legislation to authorize
the EDCs in 1989. Amarillo voters that year approved a half-cent sales tax
to fund economic development.

8. Q: WHO IS IN CHARGE OF THE AMARILLO EDC?

9. A: The city council must appoint a five-member board of directors to serve
terms of no more than six years. The AEDC board members just serve
three-year terms, but may be reappointed to serve an additional three-year
term. State law does not enforce residency restrictions for Type A
board members.
Q: WHO IS IN CHARGE OF THE AMARILLO EDC?

10. Q: HOW IS AN EDC FUNDED?

11. A: Most EDCs are funded by sales tax revenue. Some also receive private
funding from local corporations or organizations. The Amarillo EDC is
supported by a half-cent sales tax that is budgeted directly to the
organization.
Q: HOW IS AN EDC FUNDED?

12. Q: HOW MUCH CAN A CITY CHARGE FOR SALES TAX?

13. A: According to state laws, the sales tax cap for local governments is
2 cents per every dollar spent. The State of Texas tax rate is 6.25%.
Q: HOW MUCH CAN A CITY CHARGE FOR SALES TAX?

14. Q: HOW MUCH ARE WE PAYING IN SALES TAX TO FUND
THE AMARILLO EDC?

15. A: The local sales tax in Amarillo is 2 cents for every dollar
spent. The AEDC receives half a cent of that local sales tax for
every dollar spent.
Q: HOW MUCH ARE WE PAYING IN SALES TAX TO FUND
THE AMARILLO EDC?

16. Q: WHO IS THE AMARILLO EDC AUTHORIZED TO SUPPORT?

17. A: PRIMARY BUSINESSES
Q: WHO IS THE AMARILLO EDC AUTHORIZED TO SUPPORT?

18. Q: WHAT IS A PRIMARY BUSINESS/JOB?

19. A: A primary business is one where the majority of its products and
services are exported outside of the local community. A primary business
brings outside dollars into the local economy.
Q: WHAT IS A PRIMARY BUSINESS/JOB?

20. Q: HOW DOES AN EDC EXPAND AND GROW
A COMMUNITY?

21. A: An EDC uses the revenue generated from the approved sales tax rate to
attract and retain primary businesses, create new jobs and, as a result,
generate wealth for a community and its residents.
Q: HOW DOES AN EDC EXPAND AND GROW
A COMMUNITY?

22. Q: HOW DOES THE AMARILLO EDC SUPPORT LOCAL
BUSINESSES?

23. A: The Amarillo EDC DOES support local businesses. While the EDC is not
authorized to financially invest in local businesses, it supports them by
bringing outside dollars into the community. New businesses support local
vendors, while employees use their salaries to support local businesses
as well.
Q: HOW DOES THE AMARILLO EDC SUPPORT LOCAL
BUSINESSES?

24. Q: HOW DOES THE AMARILLO EDC SUPPORT LOCAL
BUSINESSES?

25. A: One of the primary programs of the Amarillo EDC is the business
retention and expansion program that assists primary businesses already
in operation in the Amarillo area. This program focuses on supporting those
companies so they can remain in and expand in Amarillo.
The Amarillo EDC provides $500,000 in annual funding to the WTAMU EnterPrize
Challenge as well as funding support to the Amarillo Chamber of Commerce.
Q: HOW DOES THE AMARILLO EDC SUPPORT LOCAL
BUSINESSES?

26. Q: WHY SHOULD THE LOCAL COMMUNITY CARE ABOUT
“OUTSIDE DOLLARS?”

27. A: Outside dollars are essential to community growth and development.
Outside dollars:
● Increase wages
● Create more jobs
● Attract new residents and families to the community
● Attract more businesses to the community
Q: WHY SHOULD THE LOCAL COMMUNITY CARE ABOUT
“OUTSIDE DOLLARS?”

28. Q: HOW DOES AN EDC EXPAND THE TAX BASE?

29. A: When the local economy grows, when jobs are added and more people
come into the community, the tax base increases. This means that the
taxes collected from expenditures increase and go right back into the city
and counties. This money can be used to support schools, infrastructure,
roads, recreational facilities and more.
Q: HOW DOES AN EDC EXPAND THE TAX BASE?

30. Q: WHY IS A DIVERSIFIED ECONOMY IMPORTANT?

31. A: Think of Midland, Texas, during an oil crash. Or talk to a farmer when
commodity prices on wheat or cattle have tanked. Ask Detroit about the
auto industry.
You can't put all of your “economic eggs” in one basket. You wouldn't bet your entire
retirement on one stock, so why bet your city's entire economy on
one industry?
Q: WHY IS A DIVERSIFIED ECONOMY IMPORTANT?

32. Q: WHY ISN’T AMARILLO GROWING FASTER?

33. A: Amarillo IS growing fast! However, the biggest barrier to growth is
workforce/talent, just like it is in many cities. Amarillo companies would
expand faster if we could recruit top talent to the community.
The Amarillo community and businesses need to work collaboratively to
reinvest in the community and develop a focused effort on recruiting and/or
retaining top talent to the area.
Q: WHY ISN’T AMARILLO GROWING FASTER?

34. Q: WHAT CAN AMARILLO DO TO ATTRACT AND
RETAIN TALENT?

35. A: The goal of the Amarillo EDC is to attract and retain businesses that
make Amarillo an even better place to live. The more our city grows, the
more attractive it is to current residents and students, making them more
likely to stay in the area. A strong, diverse city also encourages people to
move to Amarillo, which in turn, further expands our city and opens it up to
more opportunity, such as large retail stores, nationally known restaurants,
entertainment venues and more.
Q: WHAT CAN AMARILLO DO TO ATTRACT AND
RETAIN TALENT?

36. Q: WHAT CAN AMARILLO DO TO ATTRACT AND RETAIN
TALENT?

37. A: West Texas A&M University is a huge asset to the community with great
students graduating every year. We need to do what we can to invest in the
school so that it can develop advanced programs of study. Additionally, we
must encourage local businesses to hire these students before they
move away.
Q: WHAT CAN AMARILLO DO TO ATTRACT AND RETAIN
TALENT?

38. Q: HOW DOES THE AMARILLO EDC SUPPORT
LOCAL BUSINESSES?

39. A: The Amarillo EDC funds one of the largest small business/business plan
competitions not just in Texas, but in the country with the annual EnterPrize
Challenge. These companies are required to stay in Amarillo and they are
also required to be primary businesses. These business then, in turn, help
support other local businesses when they work with local
vendors/suppliers.
Q: HOW DOES THE AMARILLO EDC SUPPORT
LOCAL BUSINESSES?

40. Q: HOW DOES THE AMARILLO EDC SUPPORT
LOCAL BUSINESSES?

41. A: Primary businesses directly drive business to local retail businesses by
making a “ripple effect.”
For example, the EDC uses sales tax revenue to attract and develop a food processing plant in Amarillo.
That food processing plant creates construction jobs, landscaping jobs, safety jobs, management jobs and
more for community members, but also brings in new residents searching for jobs. Employees will have
money to spend within the community. They will buy and build houses, purchase groceries, go out to eat at
local restaurants with their families, grab coffee at local coffee houses with their friends, etc. Their spending
supports local businesses and increases the overall tax base.
Q: HOW DOES THE AMARILLO EDC SUPPORT
LOCAL BUSINESSES?

42. To connect with the Amarillo Economic Development
Corporation and to stay in the know on exciting community
happenings, please visit www.AmarilloEDC.com.