Incentives Resource Center
Incentives, primarily in the form of tax abatements, are one of the most popular, prominent and efficient forms of direct development assistance. Incentives are generally not categorized as “financing” but rather a tool to reduce financial barriers facing businesses, investors or industry. As such, CDFA focuses exclusively on tax abatements when discussing incentives.
A tax abatement is the relief of tax liability by a tax-payer. For example, if a company locates a plant in a community, it may ask for and receive a tax abatement for relief of all or a portion of its property tax liability. Tax abatements are provided at both the state and local level and can be applied to property, sales, income or other tax liabilities.
Nearly every state authorizes the use of tax abatements. However, many communities do not employ this tool a part of their incentive policy. Conversely, many communities are very aggressive in their use of tax abatements. State agencies are particularly active in the use of tax abatements as incentives to attract and retain businesses.
Tax abatements also come with a considerable amount of accountability. In recent years, the use of tax abatements has spiked in controversy throughout the country. Greater due diligence measures and performance based awarding of tax abatements is becoming common place in development industry. In addition, tools such as smart analytics and abatement reduction have also emerged to ensure accountability on the part of government and business when employing tax abatements.
-Incentives Policies & Procedures
Policies and procedures are the guiding principals behind the use of incentives. CDFA collects policies from communties across the country.
Effective Use of Property Tax Incentives - Lincoln InstituteMembers only Login
This study was published by the Lincoln Institute. The authors examine how to make property-tax incentives for business more effective. They find that governments should not approve every incentive request, target use of incentives, avoid incentive wars, cooperate with surrounding localities, and conduct regular evaluations.
Striking a Balance: A National Assessment of Economic Development IncentivesMembers only Login
This paper, produced by the Upjohn Institute, analyzes the intensified use of incentives as local governments compete for new plants and corporate relocations, and as private firms increasingly demand a deal. While incentives promise jobs and tax revenue, scholars and practitioners criticize their high cost and limited accountability. Through a comparison of matched establishments, this paper explores how governmental incentive-granting strategy impacts incentive performance.
Financing Disaster Recovery and ResiliencyMembers only Login
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Keren Bolter discusses the science behind some of the natural disasters in Florida, then she explores the financing programs and structures for disaster resiliency, partnerships and collaborative efforts to identify financing solutions, and lessons learned from communities that are in the rebuilding process.
Communities throughout the country use incentives every day and CDFA collects headlines on projects and news daily.
The Intro Incentives
course considers how incentives are used in today’s economic environment and outlines steps that are being taken to reduce risk and achieve better outcomes. In particular, this course addresses the characteristics of well-designed incentive programs and processes to ensure meaningful impact, value, and accountability.
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