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o geed BUSITI ss Incentives <br />Nationally, there are thousands of economic development organizations all attempting to <br />improve the condition of their local economies. Competition for a limited number of <br />expanding or relocating "contributory" businesses is extremely fierce. <br />So, market forces, a limited supply of companies and a large demand by communities, <br />have fostered the creation of business incentives. <br />Incentives or financial inducements offered by communities and states are designed to <br />reduce the initial set -up and long term operating costs for primary employers, to help <br />them be profitable. <br />If a local area is in chronic economic distress, community leaders many times will do <br />anything they possibly can to lure a contributory employer to the area, including giving a <br />company a free building. <br />However, offering incentives is not limited to distressed areas. Almost all of the most <br />dynamic, growing economies in the United States offer an array of incentives. Why? <br />Because community leaders know they must continuously attempt to grow economically, <br />or they will surely decline. <br />The most frequent questions raised by citizens in a community are whether incentives are <br />necessary and are they worth the expense. Sometimes offering incentives, government <br />money, to a private concern can be controversial. <br />Determining whether or not the financial investment made by the <br />community is worthwhile can be mathematically calculated. Let's <br />revisit the economic impact of the 1,000 job manufacturer. <br />Suppose the local government offers an inducement package to this <br />company worth $1,000,000 a year for ten years, or $10,000,000 <br />total. Sounds like a lot of money. However, remember the company <br />will generate $8,500,000 in local taxes and $85,000,000 in payrolls <br />each ye You do the math. <br />Incentives should only be offered to "qualified" companies. To be <br />competitive in the economic development marketplace, most <br />communities need to have some type of incentive program available. <br />Move of bough -- Pagge 35 - Version august 20, 20-07 <br />