The gamble of economic incentives

When the Union County Commissioners recently got to meet the consultants helping to revamp the area’s economic development strategy, their message was clear: “We need your help.”

The commissioners said they are struggling to know how to tackle tax incentives and other issues related to economic development and growth.

Representatives from Boyette Strategic Advisors, including the company’s leader, Del Boyette, visited the county commissioners recently, both for introductions and to let the board know where they are in the process. County officials connected with the Arkansas-based consulting firm earlier this year to update the plan for economic development.

Commissioner Tom McCarthy told the consultants that, given the conversations and concern in the community around tax incentives, local officials need help making the right decision for the whole community.

“I think there is an inherent struggle that a community has when we’re competing for whatever type of industry or business it is, to understand what our competitive advantages are and our inherent strengths,” he said. “It’s a game of poker. How much do we have to throw on the table to land this fish and we’re not giving away the farm?”

In July, Union County officials said they were going to start the process of updating their Economic Development Strategy, which hasn’t been done since 2014. The strategy differs from the Economic Development Incentive Policy (EDIP), as it’s more of an overall look at economic development rather than the detailed information in the EDIP.

McCarthy said while officials understand that there can be benefits from the development and to get those they have to be competitive, but they feel they are only ever told they have to say “yes” or the company will leave.

“We’re always told, ‘well, they’re always looking at somewhere else.’ But not everywhere else has access to Columbus and the labor. Not everywhere else has a (U.S.) 33 that’s going to make it easier to get there. Not everywhere else has a fairly well-educated, conservative community that has a strong work ethic,” he said. “So, how much do we have to provide an incentive so that the services people need can be provided and we don’t have to double the size of the water plant because we just built 10 data centers and they’re not paying the cost of the new water plant. Everyone else that’s already been here is paying for that water plant.”

Some deals in the past, he said, have been good for some but end up hurting other agencies around the county that don’t get to share in revenue collected from a particular development.

“Let me give you an example. So, if there is a major tax abatement given to a business and it’s located in, say, Marysville and Marysville collects an income tax but there’s no sharing of the tax revenue with county-wide agencies, now the county-wide agency needs to go on the ballot,” McCarthy said. “In essence, if you live outside of Marysville, you end up having to pay more to shore up the fact that this industry is not paying anything into that pot.”

McCarthy said he’s not solely talking about the city, noting that development is happening in a variety of communities in the county. Whether the issue is actually an issue or just community perception – he said he believes it is a real issue – it needs to be addressed.

Additionally, Commissioner Steve Robinson said there needs to be more consideration for the agricultural community in the county.

“This all happens at the expense of agriculture. All those folks Tom was talking about, that feel the pinch of what’s happening in Marysville against what’s happening in the county, are the ag people, basically,” he said. “So, unless you get those folks engaged in this, I don’t think you’re going to get the true picture.”

Boyette said the firm could help with those questions, especially once data is collected from community surveys, though he said it sounds like a policy and philosophy issue. He said the community has to decide how they feel about access to services and amenities and if residents are okay with driving to get them.

“Every place is different,” Boyette said. “We look forward to (talking). Our minds are already churning as to what’s important. You’re elected by the people and you all have already verbalized some things that are very important to you because of the people you represent. We’ll hit on it.”

The consultants said the next steps involve surveys and starting to have conversations with the community. Survey results would then be analyzed sometime before Christmas and then they would provide an update to the county in January.